Identification Number:
RS 01405 TN 5
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Wage Correction/IRS Coordination
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part RS – Retirement and Survivors Insurance
Chapter 014 – Wages
Subchapter 05 – Wage Correction/IRS Coordination
Transmittal No. 5, 07/15/2021

Audience

PSC: CA, CS, ICDS, IES, ISRA, RECONR, SCPS, TSA, TST;
OCO-OEIO: CR, CTE, FCR, FDE, RECONE, RECONR;
OCO-ODO: CR, CST, CTE, CTE TE;
FO/TSC: CS, CS TII, CSR, CTE, DRT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

OISP

Effective Date

Upon Receipt

Background

We are correcting the formatting throughout the sections to comply with existing requirements. We are updating correct references and removing obsolete information. We are expanding on the instructions and providing clarification for using the 374 listing code. We are adding specific examples of expanded uses for the 374 listing code.

Summary of Changes

RS 01405.047 Multiple Employee Reporting Error

  • We corrected the formatting throughout the section.

  • We expanded on the titles of Sections A and B for clarity purposes.

  • We clarified use of the National Wage Reporting Problem System (WRPS) in section B1.

  • We corrected references within the section.

RS 01405.050 Wages Reported as Self-Employment Income or Self -Employment Income Reported as Wages

  • We clarified the title of this section by changing it from “Wages Reported as SEI or Vice Versa” to “ Wages Reported as Self-Employment Income or Self-Employment Income Reported as Wages.

  • We corrected the formatting throughout the section.

  • We expanded on the titles of Sections A and B for clarity purposes.

  • We reformatted Section A to elaborate on the content for clarity.

  • We updated correct POMS and MSOMS reference in Section B.

  • We added a new Section C, “Prepare proper notice to wage earner or taxpayer."

RS 01405.080 Inquiries Concerning Refund of Social Security Taxes

  • We corrected the formatting throughout the section.

  • We expanded on the title of Section A as well as subheadings for clarity purposes. In this section, we also added:

    • A referral to the local IRS office if a question arises about self-employment taxes paid.

    • A NOTE to address payment of payroll taxes to both SSA and to the IRS, and the date transfer of responsibilities occurred.

  • In Section B, we added a new reference pertaining to Foreign Students, Exchange Visitors and International Cultural Exchange Visitors.

RS 01405.090 Listing Code 374 (Earnings Record Discrepancy/Adjustment)

  • We corrected the formatting throughout the section.

  • We expanded on the titles of Sections A and B for clarity purposes.

  • We expanded on the subheadings in Section B for clarity purposes.

  • We provided more specificity throughout the section on the expanded use and processing of the 374 listing code for clarity purposes.

  • Content that was previously in subsection B.4 is now folded into Section C for clarity purposes.

  • Content that was previously in Section C is now in newly created Section D.

RS 01405.047 Multiple Employee Reporting Error

A. Introduction to handling multiple employee reporting errors from a single employer

When more than one employee's wages have not been reported or have been incorrectly reported in a single employer's report, e.g. incorrect tax year (TY) on the employer's report or incorrect maximum wages for the TY, follow the procedures in this section.

B. Procedure to determine the handling of employer reporting errors

1. Determine if SSA is aware of the reporting problem

Check the National Wage Reporting Problem System (WRPS) using the Employer Search function to determine if SSA is aware of the reporting problem. All employees from Field Offices (FO) and Program Service Centers (PSC) have access to main menu of this application. Employer Service Liaison Officers (ESLO), Wage Reporting Specialists (WRS), and CO employees (involved with wage reporting issues) have access to some additional buttons on main menu e.g. VALIDATION, WORKING FILE, and NATIONAL REPORTS. Contact your lead technician or wage specialist to contact the New York Regional Office, per the WRPS link, to determine if it is appropriate to request the information for your case.

  • Only ESLO/WRS have capability to view submissions, have access to the ‘Working File’ button and the validation button, and can record first and second contact with the employer. If a case is not resolved at RO level, then ESLO/WRS can transfer a case from RO to CO for further action.

  • FO/PSC employee/ESLO/WRS can refer a case.

Contact your lead technician or wage specialist to contact the New York Regional Office, per the WRPS link, to gain access, if needed.

2. SSA is not aware of the reporting problem

If the employer is not listed in the WRPS and it is apparent that a reporting problem exists, follow the guidelines in the WRPS "User Guide" and discuss with your technical staff (Customer Service Representative or Claims Specialist) about having the employer information added to WRPS. See RS 01404.160, for instructions.

3. Individual initiated the investigation of their earnings record

In claims situations, process the individual’s request for correction. For pre-claim situations, if it is apparent that the employer report is pending, explain this to the individual (RS 01404.005). If the individual requests an immediate correction, process the request for correction (RS 01404.160C3).

RS 01405.050 Wages Reported as Self-Employment Income or Self-Employment Income Reported as Wages

A. Policy for correcting misreported wages or self-employment income (SEI)

When wages are reported as SEI or SEI is reported as wages, two distinct earnings record (ER) adjustments are required. The two adjustments are:

  1. 1. 

    For wages reported as SEI, delete the SEI and add the wages.

  2. 2. 

    For SEI reported as wages, delete the wages and add the SEI.

B. Procedure for correcting the earnings record

Process the adjustments in wages and SEI via Item Correction (ICOR) (see RS 01804.150, RS 01804.165, and RS 02201.026, and MSOM MS 01522.001 through MSOM MS 01522.005; and MSOM MS 01523.001 through MSOM MS 01523.005).

C. Prepare proper notice to wage earner or taxpayer

1. Include the adjustments made to the ER, and

2. Include appeal language.

RS 01405.080 Inquiries Concerning a Refund of Social Security Taxes

A. Procedures to address inquiries about refunds

1. Referrals to the employer or to the Internal Revenue Service

Refer inquiries about a possible refund of Social Security taxes, based on a downward wage adjustment or a coverage exception, to:

  1. a. 

    the individual's employer, if the refund relates to an adjustment in wages and the year involved is within 3 years of time of the inquiry to SSA, so that the employer can file with IRS for a refund of both the employer's and the employee's share of the contributions; or

  2. b. 

    the nearest IRS office, if the refund relates to an adjustment in wages and if the year involved is not within 3 years of time since the inquiry to SSA; or

  3. c. 

    to the taxpayer's nearest or servicing IRS office if the inquiry is regarding Social Security taxes paid with a self-employment tax return.

NOTE: No Social Security taxes have been paid directly to Social Security since 1986. Public Law 99-509 (Omnibus Budget Resolution Act of 1986), effective January 1, 1987, transferred responsibility for collecting FICA taxes for wages paid under Section 218 agreements from SSA and the States to the IRS.

2. Time limitations for refunds

See RS 02201.025, IRS Statute of Limitations - Tax Assessments, Refunds and Credits, for a discussion of some of the exceptions under the Internal Revenue Code (IRC). IRC time limitations on refunds may apply.

3. Coverage exception applies

If you receive an inquiry from an individual who is a foreign student or exchange visitor, advise the inquirer about the coverage exception, which might be applicable to services performed by such a person. See RS 01901.740

If the person believes that a coverage exception applies and the inquiry relates to the procedures for a refund of erroneously withheld Social Security taxes, refer the person to the individual’s employer or the nearest IRS office, in accordance with RS 01405.080 A.1.

B. References

Wage Correction Policy, RS 01405.003. SSA-IRS Coordination, RS 01405.115

Foreign Students, Exchange Visitors and International Cultural Exchange Visitors, RS 01901.740

 

 

RS 01405.090 Listing Code 374 (Earnings Record Discrepancy/Adjustment)

A. Procedure for using Listing Code 374

When SSA authorizes an earnings adjustment (including any for military service) or if SSA is still processing the posting of earnings, list cases in the Processing Center Action Control System (PCACS) under Code 374.

NOTE: Use Code 374 for temporary and ongoing earnings inaccuracies and remove the code after resolving all earnings issues.

B. When to use Listing Code 374

1. Adjustments involved

When the Suspense Reinstate Daily Batch Adjustment and Reinstate System (SRDBAR) rejects an item correction (ICOR) adjustment and requires correction, list cases in the Processing Center Action Control System (PCACS) under Code 374 (SRDBAR) and requires correction. See MS 01520.003, MS 01530.001 and MSOM PCACS 005.010.

NOTE: Also, list for beneficiaries with a history of inaccurate earnings postings, (ex. ID theft cases, ongoing issues with disclaimed SEI, etc.)

2. Earnings Record posting is still in process

List in PCACS if the posting of reported earnings is delayed (e.g., there is a problem with an employer's report). See RS 01404.160.

3. Pre-lag development

If excluding a year from the computation of benefits list per instructions in RS 01404.110 Pre-lag Development and Documentation Requirements for Resolving Earnings Record Inaccuracies.

C. When to cancel the Listing Code 374

Cancel the listing code when clearing an SRDBAR reject and/or any subsequent Automated Earnings Reappraisal Operation (AERO) output reflects the corrected earnings, delayed posting, or military service periods for the year(s) at issue.

D. Description of automated earnings reappraisal operation action with Code 374

Cases listed under Code 374 will identify any AERO action for claims authorizer review, see SM 04610.032.

This is to prevent automatic processing of PIA increases when processing any AERO action. This will ensure that the ER revision made, delayed posting, or military service is taken into account when processing any AERO action, see SM 04610.032.


RS 01405 TN 5 - Wage Correction/IRS Coordination - 7/15/2021