Identification Number:
GN 02201 TN 36
Intended Audience:See Transmittal Sheet
Originating Office:DCBFM OFPO
Title:General Information Title II, Title XVI, and Title XVIII Overpayments - Part I
Type:POMS Transmittals
Program:Title II (RSI); Title XVI (SSI); Disability; Medicare
Link To Reference:
 
PROGRAM OPERATIONS MANUAL SYSTEM
Part 02 - General
Chapter 022 - Overpayments
Subchapter 01 - General Information Title II, Title XVI, and Title XVIII Overpayments - Part I
Transmittal No. 36, 07/2018

Audience

FO/TSC: CS, CS TII, CS TXVI, DRT, FR, OA, OS, RR, CSR, TA, CTE, TSC-CSR
PSC: BA, CA, CCRE, SCPS, CS, LDS, DS, LDCR, DCR, IES, PETE, RECONR, TST, TSA
OCO-ODO: BTE, CCE, CS, CST, CTE, CTE TE, DEC, DS, DSE, PAS, PETE, PETL, RCOVTA, RECOVR
OCO-OEIO: BIES, BTE, CS, CTE, FCR, PETL, RECONR, RECOVR

Originating Component

OFPO

Effective Date

Upon Receipt

Background

The Office of Financial Policy and Operations (OFPO) reviewed this document. Tax Refund Offset (TRO) allows Treasury to collect some or all of an individual’s tax refund for payment on an overpayment debt. A few cases require the IRS to conduct additional investigation to advise the referring agency on how to proceed. This transmittal also provides instructions for handling several special situations that will arise under this program.

Summary of Changes

GN 02201.038 Tax Refund Offset (TRO) Problem Cases

The changes involved renaming the headings and sub-headings to be more descriptive, updating the contact links and mailing address, and rewording sentences to remove most of the passive voice.


GN 02201.038 Tax Refund Offset (TRO) Problem Cases

A. General overview of problem cases

The Department of the Treasury (Treasury) Internal Revenue Service (IRS) has special requirements for resolving “problem cases” in the Tax Refund Offset (TRO) program. Problem cases are cases which require resolution with the assistance of the Treasury, IRS, or both the Treasury and the IRS. These special cases are few in number. Generally, problem cases have the following characteristics:

  • The referring agency cannot resolve the situation with its own records and information.

  • IRS must conduct additional investigation and advise the referring agency of its findings.

  • The Treasury Offset Program (TOP) for TRO certified the debt and offset.

In most instances, the problem cases arise after the debtor or other individual receives notice from Treasury that the offset has occurred.

NOTE: Tax related questions are not considered TRO problem cases. Refer callers with tax matter questions to the IRS toll-free telephone number (1-800-829-1040).

B. Guidelines for handling problem cases

IRS has strict guidelines for handling problem cases. The most important guideline is that contact between referring agencies and IRS is done through a single contact point. SSA’s Office of Financial Policy and Operations (OFPO), located in central office, is the contact point with IRS. OFPO is responsible for:

  • Referring problem cases to IRS.

  • Conducting regular case status follow-ups with IRS on the status of cases.

  • Advising our agency of resolutions and actions.

IMPORTANT: For problem cases, do not reverse the offset by refunding the amount to the debtor. OFPO will advise the payment center when any refunding or other corrective action is necessary.

C. Procedure for identifying and routing problem cases

The following describes the procedures for identifying and routing problem cases in the Program Service Center (PC) and Field Office (FO). There are specific examples at the end of the document.

1. Situation Identified as Problem Case

If a situation is a problem case, the PSCs and FOs identify and document it. When you identify a problem case, proceed as follows:

Step

Action

1

Describe the situation in as much detail as possible on a Form SSA-5002 (Report of Contact). Include the following:

  • debtor's name (and name of any other involved individual);

  • debtor's SSN;

  • date;

  • amount of offset;

  • debtor's or other person's daytime telephone number;

  • your name, work number, and office.

2

Obtain copies of any TRO related correspondence sent from SSA and the IRS to the debtor or other persons, if possible. Also, include any letters from the individual.

3

Provide a copy of the External Collection Operation (ECO) query, Master Beneficiary Record (MBR), Supplemental Security Record (SSR), and the Recovery of Overpayments, Accounting and Reporting (ROAR).

4

Explain to the person SSA cannot resolve the case on our own and we will coordinate with IRS to resolve the issue.

5

Add a special message to the record “TRO Problem Case.”

2. Routing Problem Cases

After obtaining all required documentation, send problem cases as quickly as possible to the appropriate Regional Office (RO). Do not send directly to OFPO. Transmit the material via fax, if possible. Otherwise, proceed as follows:

  1. PSC/FO Action

Proceed as follows with the documentation using in-house mail:

  • Scan and email materials with subject “TRO PROBLEM CASE” to the RO, Program Operations and System, RSI/SSI Program Branch, RSI Operation Section.

  • Note: FO employees should scan material, enter a vHelp request, and upload the material to vHelp for RO analysis. PSC employees do not have access to vHelp.

  1. RO Action

Proceed as follows with the documentation:

  • Review the documentation, clarify any outstanding issues and determine if the situation is a problem case.

  • If it is a problem case, send the information to OFPO. Transmit the material to OFPO via email, if possible, using the following link, filling in the form, and uploading the document: http://sharepoint.ba.ssa.gov/DCBFM/OFPO/OPRP/Inquiry/SitePages/Home.aspx

  • If you cannot email the material, transmit the material to OFPO via fax using the following fax number: (410) 965-0384.

  • If you cannot email or fax the material, send it in an envelope (clearly marked “TRO Problem Case—DO NOT OPEN in the Mailroom”) to:

      

    OFPO Office of Payment and Recovery Policy
    6401 Security Boulevard
    2-A-10 East High Rise
    Baltimore, Maryland 21235-6401
  • If you need additional PC documentation prior to sending the case to OFPO and send the material to the Operations Analysis Staff in the PC. Ask the PC to obtain the data, send it directly to OFPO and inform the RO.

3. Investigation Complete

If IRS notifies OFPO when it completes its investigation, OFPO and the RO takes the following actions:

  1. OFPO:

    • Notifies the RO, which is controlling the problem case.

    • Advise of any necessary action.

  2. RO will:

    • Coordinate notice preparation if we must notify the debtor or other individual.

    • Tailor the language to address each situation.

    NOTE: Do not use pre-developed or “canned” language because it is not conducive to problem cases.

    • Ensure that SSA takes any corrective action, such as refunding the offset amount.

NOTE to PC and FO: Inform the RO if IRS notifies the person when a problem is resolved. If possible, send the RO a copy of the IRS notice.

D. Case Studies

Following are some examples of what is and is not a problem case:

1. Wrong SSN on Tax Return

Jack Spratt erroneously used his daughter's SSN when filing his Federal income tax return. His daughter, Pat, was overpaid as a student because she ceased full time attendance and did not notify SSA. SSA referred Pat's debt to TOP for offset. Because Mr. Spratt used his daughter's SSN on his form 1040, TOP offset his tax refund to recover Pat's delinquent debt. In February, Mr. Spratt contacted SSA to ask why TOP offset his tax refund. Since SSA cannot resolve the issue without information from Treasury and IRS regarding Mr. Spratt's tax return, the situation is a problem case.

2. Two Agencies Claim Tax refund

Mr. August Hickey, a former disabled wage earner, owes SSA a delinquent debt of $1,294. He also defaulted on a $1,500 student loan made by the Department of Education (DOE). Both agencies referred their debts to TOP for offset. In March, TOP offset Mr. Hickey's entire tax refund of $1,525. Since Mr. Hickey had received a pre-offset notice from Treasury, but not DOE's pre-offset notice, he was unaware that DOE had referred the defaulted student loan. Confused, he contacted SSA to ask why SSA withheld his entire refund of $1,525 to recover SSA's debt of $1,294. This is a problem case because SSA must have Treasury and IRS verification of the offset amount.

3. Amount Withheld Exceeds Amount Certified For Offset

SSA notified Dwight Randle, an overpaid ex-student beneficiary, that SSA referred his $543 debt to TOP for offset. When the offset occurred, Treasury notified Mr. Randle that they withheld SSA's debt of $593. Since SSA's records showed a debt for $543, intervention is required to resolve the issue and refund the excess amount withheld. The situation is a problem case.

4. Congressional Inquiry Resulting From Offset (Not a Problem Case)

SSA referred Susan Smith's delinquent debt to TOP for offset. The offset occurred in March. The debt met all of SSA's criteria for referral to TOP and SSA correctly referred the debt. Susan and her attorney contacted her Congressperson for support questioning the legal enforceability of the offset. The Congressperson wrote a letter to the Commissioner, asking why SSA applied the offset and if it was a legal action on our part. Although the Congressional inquiry requires special processing, the situation is not a problem case. SSA has all of the information it needs in its records and can respond to the inquiry without help from Treasury or IRS.




GN 02201 TN 36 - General Information Title II, Title XVI, and Title XVIII Overpayments - Part I - 07/03/2018