|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|
|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
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
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
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
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:
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);
amount of offset;
debtor's or other person's daytime telephone number;
your name, work number, and office.
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.
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).
Explain to the person SSA cannot resolve the case on our own and we will
coordinate with IRS to resolve the issue.
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
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
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
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:
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”)
OFPO Office of Payment and Recovery Policy
6401 Security Boulevard
2-A-10 East High Rise
Baltimore, Maryland 21235-6401
3. Investigation Complete
If IRS notifies OFPO when it completes its investigation, OFPO and the RO
takes the following actions:
NOTE: Do not use pre-developed or “canned” language
because it is not conducive to problem cases.
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
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
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