Friday, April 29, 2011

SSA Sending Out No-Match Letters to Employers

The Social Security Administration (SSA) has resumed sending employers a letter called the “Decentralized Correspondence” (DECOR) notice. The notice informs employers that it could not process a Form W-2 because it does not have an employee's Social Security number (SSN) or name, or the SSN or name submitted does not match information in the SSA's earnings records [SSA Program Operations Manual System, Employer Reports - Wage Reports, Id No. RM01105 TN 06, 4/6/11].

There are a number of reasons why reported earnings information may not agree with SSA records. These include typographical errors, unreported name changes, inaccurate or incomplete employer records, or misuse of an SSN. In these cases, the SSA places the earnings information in the Earnings Suspense File (ESF) instead of posting the earnings to a worker's record. The SSA attempts to resolve items placed in the ESF by sending DECOR notices to employees, employers, and self-employed workers to inform them that a reported name or SSN does not match the SSA's records.

The SSA did not send employer DECOR notices for the 2007 through 2009 tax years because of litigation on a proposed Department of Homeland Security (DHS) regulation that involved a related correspondence process. The DHS later rescinded the proposed regulation, and the SSA is now sending out DECOR notices for the 2010 tax year. The SSA will not send out the DECOR notices that it held for the 2007 through 2009 tax years.

Employers will be asked to check their records to determine if the information provided to the SSA matches those records. If they still currently employ the employee, they may be instructed to ask the employee to provide his or her SSN card to verify that they accurately reported both the employee's name and SSN. If employers prepare a Form W-2c, they will be instructed to send it with a covering Form W-3c transmittal to the SSA with no supporting documents attached. Employers will be encouraged to call the SSA toll-free number at (800) 772-6270 if they have any questions regarding the SSNs listed on the DECOR notice.

If the employer and the employee are unable to resolve the issue based on reviewing the SSN and name, employers will be instructed to tell the employee to contact a local Social Security office to resolve the discrepancy. Employers should give the employee a reasonable amount of time to rectify the situation. It may take up to two weeks, and sometimes longer, to get a new or replacement Social Security card.

If the employer is unable to resolve the no-match with the employee (e.g., the employee is unable to provide a valid SSN or may no longer work for the employer), the SSA will advise the employer to document efforts made to obtain the corrected information. The documentation should be retained in accordance with federal recordkeeping requirements. Employers will be encouraged to use the SSA's online Social Security Number Verification Service (SSNVS) to minimize future mismatches.

EDCOR letters. The SSA has discontinued sending out “Code V” educational correspondence (EDCOR) letters to employers. These letters had been sent to employers if their wage reports included more than a certain number of employee names and SSNs that the SSA could not match to its records.

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