HI 01120: New Initial Determinations Using Beneficiary Information

Effective Dates: 11/22/2013 - Present

TN 8 (09-13)

A. Policy for use of beneficiary provided corrected IRS tax data

In the event there is an error in the information we are using to determine an income-related monthly adjustment amount (IRMAA), which the Internal Revenue Service (IRS) provided, the beneficiary may request and receive a new initial determination. The beneficiary must provide proof from IRS acknowledging the error and the correction for the same taxable year as the year used for the IRMAA determination.

NOTE: If a beneficiary alleges that the tax-exempt interest income (TEI) IRS provided is incorrect, we can accept the beneficiary's signed copy of the tax return as proof of the error. The signed tax return has to show an obvious error as described in HI 01120.050F. If a beneficiary alleges being a victim of identity theft, the beneficiary has to provide proof from IRS of the allegation. For required evidence and processing instructions, see HI 01120.050C and HI 01120.050D.

B. Requesting a new initial determination based on corrected IRS tax information

A beneficiary may request a new initial determination based on a correction of the data IRS provides, anytime within the affected premium year, and following the date on the IRMAA determination notice. If a beneficiary does not file a timely request, good cause for late filing could be applicable. For instructions on extending the time limit for filing an appeal, see GN 03101.020.

Correction of erroneous tax data that IRS provides us is only effective for the same taxable year as the year used for the original IRMAA determination. We will accept and use corrected tax information even if it is disadvantageous to the beneficiary.

C. Evidence needed to support the change

If there was an error in the information IRS provides us regarding the beneficiary's modified adjusted gross income (MAGI), we will accept as proof:

a letter from IRS documenting the factual data they originally received and the erroneous information that they provided us, or
a transcript from IRS with new information and a copy of the filed tax return for the tax year the error occurred.

NOTE: If the Adjusted Gross Income (AGI) and TEI on the beneficiary’s filed tax return is not different from the original MAGI IRS provided us, do not request an amended tax return. The AGI and TEI on the tax return should match the data we have on file or the data on the transcript.
For claims of identity theft, the beneficiary must provide a TRDBV transcript from IRS and a copy of the filed tax return for the tax year the error occurred. If the beneficiary did not have to file a tax return, IRS can provide the beneficiary with IRS Letter 3538. The beneficiary may also submit OMB Form 14039 Identity Theft Affidavit as proof of the identity theft allegation along with the transcript and filed tax return or letter from IRS.

D. Processing a request to use corrected IRS data

If	Then
The beneficiary states there was an error in the MAGI IRS reported to SSA and he or she has proof from IRS about the error.	Obtain proof of MAGI and tax filing status information from the beneficiary. Access the IRMAA screens (For descriptions of the IRMAA screens see MSOM T2PE 008.001 through MSOM T2PE 008.019) On the IRMN screen: Enter the Beneficiary's Own SSN. In the “Select the Desired Option” field select “1” Establish. Input the premium year the new initial determination applies to In “Select the Desired Function” field select “2” Tax Information Input the Tax Year the beneficiary requests we use to correct the IRMAA. Press Enter. The PYTY screen appears when there is data on file for the tax year requested. The PYTY screen displays the data under the Highest Probative Value Data Field. (For an explanation of Highest Probative, see MSOM T2PE 008.019.) On the PYTY screen: Select “2” New Tax Data. The system will process the determination using the corrected tax information provided by the beneficiary. Press enter. On the IRMA screen Input the beneficiary's adjusted gross income and tax-exempt interest for the tax year the beneficiary is correcting. For the “Select Type” field, select “4” IRS Tax Correction Data. Show proof as “1” Proven. Press Enter. The IRRE Screen will display the current and recalculated IRMAA data. The “New Determination Results” field will provide the determination based on the information entered. The IRMN Screen will display an alert to go to the EVID screen to document proofs submitted for the event reported. Pressing any “PF” key or the “Enter” key from the IRMN screen, will take you to the Shared Processes Menu. Record the evidence provided on the EVID screen in Shared Processes. (For policy on Evidentiary Standards, see GN 00301.286 through GN 00301.300. For descriptions of the EVID screens see MSOM EVID 001.003. For an explanation of how to complete the EVID screens see HI 01120.050E.)
The beneficiary states there was an error in the MAGI IRS reported to us. The beneficiary has contacted IRS, and is waiting for proof from IRS about the error.	Input the information provided by the beneficiary on the IRMAA screens and show proof as “PENDING” on the IRMA screen. (For descriptions of the IRMAA screens see MSOM T2PE 008.001 through MSOM T2PE 008.019. For instructions on processing a new initial determination see HI 01120.001F.) If the beneficiary awaiting information from IRS recontacts us, advise the beneficiary that if he or she obtains the required documentation after the dismissal, he or she can request a new initial determination again.
The beneficiary states there was an error in the MAGI IRS reported to us and the beneficiary has not contacted IRS.	Advise the beneficiary to contact IRS at 1-800-829-1040. For procedures on handling a request for a new initial determination when evidence is not readily available, see HI 01120.001G. Input the information provided by the beneficiary on the IRMAA screens and show proof as “PENDING” on the IRMA screen. (For descriptions of the IRMAA screens see MSOM T2PE 008.001 through MSOM T2PE 008.019.) If the beneficiary awaiting information from IRS recontacts us, advise the beneficiary that if he or she obtains the required documentation after the dismissal, he or she can request a new initial determination again.

E. How to record evidence on EVID screens

If	Then
The beneficiary provides a copy of the filed tax return and a letter from IRS.	Access the EVID screen in Shared Processes. (For policy on Evidentiary Standards see GN 00301.286 through GN 00301.300. For descriptions of the EVID screens see MSOM EVID 001.003.) Select “WAGES” as the document submitted as proof. For “Document Event Type” show 12/31/ccyy (for the year of the corrected return). For “Issuance/Recordation Date” show “Y.” For the “Date Issued” show the date of the IRS letter. For “Document Type” enter: corrected data-IRS Letter confirming error.
The beneficiary provides a copy of the filed tax return and a transcript from IRS.	Access the EVID screen in Shared Processes (For policy on Evidentiary Standards see GN 00301.286 through GN 00301.300. For descriptions of the EVID screens see MSOM EVID 001.003.) Select “WAGES” as the document submitted as proof. For “Document Event Date” show 12/31/ccyy (for the year of the corrected return). For “Issuance/Recordation Date” show “Y”. For the “Date Issued” show the date of the IRS Transcript. For “Document Type” enter: corrected data-IRS reporting error-IRS transcript.

Then

The beneficiary provides a copy of the filed tax return and a letter from IRS.

Access the EVID screen in Shared Processes. (For policy on Evidentiary Standards see GN 00301.286 through GN 00301.300. For descriptions of the EVID screens see MSOM EVID 001.003.)
Select “WAGES” as the document submitted as proof.
For “Document Event Type” show 12/31/ccyy (for the year of the corrected return).
For “Issuance/Recordation Date” show “Y.”
For the “Date Issued” show the date of the IRS letter.
For “Document Type” enter: corrected data-IRS Letter confirming error.

The beneficiary provides a copy of the filed tax return and a transcript from IRS.

Access the EVID screen in Shared Processes (For policy on Evidentiary Standards see GN 00301.286 through GN 00301.300. For descriptions of the EVID screens see MSOM EVID 001.003.)
Select “WAGES” as the document submitted as proof.
For “Document Event Date” show 12/31/ccyy (for the year of the corrected return).
For “Issuance/Recordation Date” show “Y”.
For the “Date Issued” show the date of the IRS Transcript.
For “Document Type” enter: corrected data-IRS reporting error-IRS transcript.

F. How to verify and correct an error in Tax-Exempt Interest Income (TEI)

A beneficiary may allege that the TEI IRS provided to us to determine whether MAGI is incorrect. We can accept the beneficiary's signed copy of the tax return or a signed copy of the electronic return if the difference in TEI is an obvious transcription error. If there is no obvious error, the beneficiary must provide proof of the error from IRS. For an explanation of the evidence needed to support a change of IRS information see HI 01120.050C.

If a beneficiary alleges a transcription error, we can correct the TEI information if the difference between the IRS data and the beneficiary's copy of the tax return:

is an obvious error;
the taxpayer is not protesting the tax amount with IRS; and
the taxpayer is not under investigation for that tax year.

Take the following steps if the only disagreement in MAGI is the TEI:

Ask the beneficiary if there is an appeal of the tax amount pending for tax year.
- If yes, explain to the beneficiary that we will need to see a letter from IRS correcting the information before we can change our records. STOP
- If no, continue to step 2.
Ask the beneficiary if there is currently an audit or investigation of the taxes pending for the year in question.
- If yes, explain to the beneficiary that we will need to see a letter from IRS correcting the information before we can change our records. STOP
- If no, continue to step 3.
Request that the beneficiary provide a signed copy of the filed tax return for the appropriate tax year.
Use the following chart to review the difference between the beneficiary's alleged TEI and the tax information that we have:

If	Then
The difference is an obvious transcription error by IRS, such as: 900000 instead of 900 on line 8b, or 124777777 instead of 1247 on line 8b, or the tax return shows $32,800 on line 9b, no amount in line 8b, and IRS reported $32,800 in tax-exempt interest income to us.	Process a “tax correction” by accessing and completing the IRMAA screens: On the IRMN screen: Enter the Beneficiary's Own SSN. In the “Select the Desired Option” field select “1” Establish Input the premium year that the new initial determination request is for. In the “Select the Desired Function” field select “2” Tax Information Input the same tax year that is being used to determine the IRMAA (Usually PY-2 but could be PY-3). Press Enter The PYTY screen appears when there is data on file for the tax year requested. The PYTY screen displays the data under the Highest Probative Value Data Field. (For an explanation of Highest Probative, see MSOM T2PE 008.019.) On the PYTY screen: Select “2” New Tax Data. The system will process the determination using the corrected data. Press Enter. On the IRMA screen: Input the beneficiary's adjusted gross income with the same information on record and input the correct TEI information. For the “Select Type” field, select “4” IRS Tax Correction Data. Show Proof as “1” Proven. Press Enter. The IRRE Screen will display the current and recalculated IRMAA data. The “New Determination Results” field will provide the determination based on the information entered. The IRMN Screen will display an alert to go to the EVID screen to document proofs submitted for the event reported. Pressing any “PF” key or the “Enter” key from the IRMN screen, will take you to the Shared Processes Menu. Access the EVID screen in Shared Processes. (For policy on Evidentiary Standards see GN 00301.286 through GN 00301.300. For descriptions of the EVID screens see MSOM EVID 001.003.) Select “WAGES” as the document submitted as proof. For “Document Event Date” show 12/31/ccyy (for the year of the tax return). For “Document Type” enter: bene signed copy-IRS transcription error
The difference is not obvious, for example: the IRS data we have shows TEI of $9348 and the beneficiary's copy of the tax return shows $7500.	Explain to the beneficiary that we will need a letter from IRS correcting the information before we can change our records.

Then

The difference is an obvious transcription error by IRS, such as:

900000 instead of 900 on line 8b, or
124777777 instead of 1247 on line 8b, or
the tax return shows $32,800 on line 9b, no amount in line 8b, and IRS reported $32,800 in tax-exempt interest income to us.

Process a “tax correction” by accessing and completing the IRMAA screens:

On the IRMN screen:
1. Enter the Beneficiary's Own SSN.
2. In the “Select the Desired Option” field select “1” Establish
3. Input the premium year that the new initial determination request is for.
4. In the “Select the Desired Function” field select “2” Tax Information
5. Input the same tax year that is being used to determine the IRMAA (Usually PY-2 but could be PY-3).
6. Press Enter
  
  The PYTY screen appears when there is data on file for the tax year requested. The PYTY screen displays the data under the Highest Probative Value Data Field. (For an explanation of Highest Probative, see MSOM T2PE 008.019.)
On the PYTY screen:
1. Select “2” New Tax Data. The system will process the determination using the corrected data.
2. Press Enter.
On the IRMA screen:
1. Input the beneficiary's adjusted gross income with the same information on record and input the correct TEI information.
2. For the “Select Type” field, select “4” IRS Tax Correction Data.
3. Show Proof as “1” Proven.
4. Press Enter.
The IRRE Screen will display the current and recalculated IRMAA data. The “New Determination Results” field will provide the determination based on the information entered.
The IRMN Screen will display an alert to go to the EVID screen to document proofs submitted for the event reported. Pressing any “PF” key or the “Enter” key from the IRMN screen, will take you to the Shared Processes Menu.
Access the EVID screen in Shared Processes. (For policy on Evidentiary Standards see GN 00301.286 through GN 00301.300. For descriptions of the EVID screens see MSOM EVID 001.003.)
Select “WAGES” as the document submitted as proof.
For “Document Event Date” show 12/31/ccyy (for the year of the tax return).
For “Document Type” enter: bene signed copy-IRS transcription error

The difference is not obvious, for example: the IRS data we have shows TEI of $9348 and the beneficiary's copy of the tax return shows $7500.

Explain to the beneficiary that we will need a letter from IRS correcting the information before we can change our records.

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