This section provides instructions on the use and disclosure of tax return information. Tax return information is defined in GN 03320.001D.1. in this section.
a paper Form W-2 (Wage and Tax Statement) and Form W-3 (Transmittal of Income and Tax Statements) , or
equivalent W-2 and W-3 magnetic media reports, or on electronic media.We also receive wage reports from IRS for self-employed persons. We process wage reports to update the earnings records we use to determine a person’s entitlement to retirement, survivors, and disability insurance benefits.
Our maintenance, use, and disclosure of these reports are subject to the Internal Revenue Code (IRC). Special rules apply regarding the maintenance, use, and disclosure of tax return information. These rules include strict penalties for the unauthorized access to such records (e.g., SSA employees browsing through this information without an official need to know) and the inappropriate disclosure of tax return information. IRS Publication 1075 explains the special rules and penalties that may apply to violations.
Our disclosure policy and operating procedures incorporate all of the IRS disclosure and confidentiality requirements for tax return information. We must adhere to these requirements when using and or disclosing tax return information.
The IRC controls the maintenance, use, and disclosure of tax return information. We also must comply with the Privacy Act when maintaining, using, and disclosing tax return information. We may use and disclose tax return information only as authorized by the IRC, the Social Security Act, or the IRS.
Sometimes we obtain wage and employment information from a source other than the wage reporting process, i.e., other than a tax return or schedule filed with IRS or with us. For example, a person may give the field office a copy of their W-2 or 1040 tax return as proof of employment in a claims situation. Because the information was received directly from the person, it is not considered tax return information subject to the restrictions in the IRC (see second bullet GN 03320.001D.2).
If we receive wage or employment information directly from a person and use the information to create or amend the person’s official earnings record, the newly created or amended earnings record is tax return information controlled by the IRC. This situation could occur when we do not receive a W-2 wage report from the employer or self-employed person and we use the information provided by the wage earner to create or amend their earnings record. We provide the definition and examples of earnings or wage information that does not constitute tax return information in GN 03320.001D.2.
Central office usually discloses tax return information by electronic data exchanges with Federal and State government agencies. The IRC or the Social Security Act specifically authorizes these disclosures. For processing instructions concerning requests for tax return information, see GN 03320.001E.
FOs may disclose tax return information only in the following situations:
In response to access requests (requests in which the subject of the tax return information is seeking their own information) or requests with written consent WHEN the person states that they have an urgent need for the information. Follow the instructions in GN 03320.001E.1. There is no fee for providing an SEQY to the wage earner, their legal representative or survivor, or the legal representative of the wage earner’s estate as these disclosures are required under section 205(c)(2)(A) of the Social Security Act and are, therefore, program related. For information about requests for detailed earnings, see GN 03340.010B.2. Certain restrictions may apply to the disclosure of tax return information over the telephone. Before disclosing tax return information over the telephone see GN 03320.005A.4. and GN 03360.005A.2.
To develop a claim or otherwise administer an SSA program, e.g., you may disclose information to a proper applicant if necessary to review an earnings record in connection with an application for benefits. For the definition of a “proper applicant”, see GN 00204.003.
To an authorized representative, as necessary, to pursue a Social Security claim on behalf of the subject of the record (you may provide the authorized representative any information, including tax return information, about the person when pursuing a claim on their behalf. For additional instructions about disclosure of tax return to authorized representatives, see GN 03316.125 and GN 03910.025).
In response to a request for tax return information about a deceased person when it is determined that the requester is entitled to receive the information. For detailed instructions about disclosure of tax return information about deceased persons, see GN 03320.020.
Employers report wages to us on form W-2 (Wage and Tax Statement). We use this information to maintain individual earnings records needed to administer our programs. We also make wage data available to the IRS for tax purposes. Historically, if we could not match the first and last name and SSN reported on form W-2 to information in our records, we sent a DECOR letter to the employee to resolve the discrepancy, or no-match. When we did not have a valid employee address, we sent a DECOR letter to the employer. In addition, we sent EDCOR letters to employers if the incidence of no-matches in the employer’s wage report exceeded a certain number. Currently we are sending EDCOR letters to employers if they submitted wage reports with one or more mismatches. For additional information on these letters, see RM 01105.027 - EDCOR and DECOR Letters Mailed when Names and SSNs Do Not Match Our Records. DECOR letter mailings are currently suspended.
Tax return information in our possession means such information as defined in the IRC. In part, the IRC defines “return information” as “a taxpayer's identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, over-assessments, or tax payments.” (26 U.S.C. § 6103(b))
Examples of tax return information:
Any tax return or schedule filed with the IRS or with us for the IRS;Form SS-4 (Application for Employer Identification Number) and any information derived from this form;
Any information taken from such a return or schedule, whether the information is kept separate or is incorporated into a system of records;
Any information pertaining to identifiable taxpayers that has been taken from returns and schedules, including Summary Earnings Query (SEQY), Detail Earnings Query (DEQY), and the Full Claims Earnings Record (FCER);
Earnings information that is a part of the Informational/Certified Earnings Records System (ICERS); Earnings information on the Interactive Computation Facility (ICF);Earnings information reported directly to us by employers on Form W-2 such as employer names and addresses, employee first and last names and Social Security numbers (SSN), the amount of wages earned and the period(s) during which such wages were earned;
Business addresses of self-employed individuals and the identities and addresses of employers of individuals if taken from IRS records;
Earnings data received by us from IRS prior to 1/1/1976; The summary earnings portion of the Social Security Statement online query output; andTax returns and employer reports (schedules attached to Form 941, the Employer's Quarterly Federal Tax Return) filed with IRS. This also includes Form 942, which IRS used prior to 1978 for reporting wages of household and agricultural employees.
DECOR letters (currently suspended) – We prepared and sent DECOR letters, commonly referred to as employee “no-match” letters, to employees, self-employed persons, and employers (only when there was no valid employee address), relating to Form W-2 reports and self-employment income reported on the Schedule SE in which the first and last name and SSN combination does not match our records.
EDCOR letters – We are sending EDCOR letters to employers, commonly referred to as employer "no-match" letters.
A DEQY is an immediate response online query that displays requested earnings information and related data such as the wage earner’s first and last name and SSN extracted from the Master Earnings File (MEF) and or the Employer Identification File (EIF). For a detailed discussion of the DEQY, see SM 00344.000.
The types of earnings information and related data displayed on a DEQY are:
Wage earner’s SSN, first and last name, date of birth (month and year), and sex (if available) (If the input SSN for a DEQY is cross-referred to another SSN, the cross-referred SSN will appear on the DEQY, see SM 00344.008.)