IM-87      09/27/06

SUBJECT:

THE INCOME ELIGIBILITY VERIFICATION SYSTEM (IEVS) IRS MATCH - INSTRUCTIONS FOR IIRS SCREEN

DISCUSSION:

This memorandum is a revised version of IM Memo IM-3, dated January 22, 1990, which discussed the Income Eligibility Verification System (IVES) matches with the Internal Revenue Service (IRS).

The Family Support Division (FSD) matches recipients of Temporary Assistance and various Medicaid programs with the IRS through the IIRS system. Tapes are produced that supply unearned income information reported to the IRS by a third party. FSD receives this information and uses it to:

• Verify eligibility,
• Verify proper benefits,
• Investigate possible overpayments, and
• Obtain information for criminal or civil prosecution.

County Managers have an ongoing responsibility for ensuring all staff are knowledgeable about IRS security requirements and for enforcing security provisions (see IM Memo IM-110, September 9, 2005).

This memorandum includes basic information regarding the IRS match, field entry instructions for the IIRS Screen, processing of release forms, and confidentiality and security issues.

The IRS Match:

The IRS match provides unearned income information on recipients in the following programs:

• Temporary Assistance,
• Adult IM cases (SAB, MA, SNC, and SP), and
• Refugee Cash and Medical Assistance.

IRS matches are generated in September every year. Matches are generated for new applicants the month following approval.

The IRS match consists of unearned income paid by a third party to the recipient. Examples of third parties reporting such income to the IRS are: banks, savings and loans, lottery organizations, etc. The reported unearned income may be income, a lump sum, or may indicate ownership of a resource that affects eligibility. The IRS Income Code Chart attachment describes the types of reported income.

Workers are informed that IRS matches are available on recipients in the following ways:

• For FAMIS Cases:
  If the IRS match is on a recipient active in FAMIS, an Alert is sent to the eligibility specialist and the supervisor. The worker:
  • Selects the alert and presses F15=REVIEW;
  • On the Select Interface (FMK0) screen, select the row containing the IRS match notice; and
  • Press F6=DETAIL to flow to the IIRS screen.
• For Legend Cases:
  If the IRS match is on a recipient inactive in FAMIS, the eligibility specialist and supervisor receive an e-mail notice that IRS information is available on the IIRS screen.

Workers have 45 days from the date the match is generated to determine continuing eligibility or ineligibility for the case.

IIRS Instructions:

The purpose of the IIRS screen is to:

• Display recipient unearned income information received from the Internal Revenue Service (IRS) match;
• Provide a field for the eligibility specialist to indicate that the information reported by IRS has already been verified in the case record; and
• Allow for the request of system-generated IEV-6, IM-6 and IEV-80 letters to the recipient.

Accessing the IIRS screen:

To access the IIRS screen, type IIRS, (space) and the recipient's DCN. Press Enter. The following information is displayed:

• The individual's DCN, name, SSN, and SSN verification code;
• The case number, case name and case status for all the cases the individual is associated with; and
• The individual's status within each case.

The IIRS screen will display the following unearned income information reported by IRS:

• The date the IRS information was loaded into the FSD system;
• The individual's SSN, name and address;
• The name of the source of income and the payer's address;
• The tax year;
• The amount of income; and
• A description of the type of income.

If only one type of income is reported, the message “Inquiry Complete” displays at the bottom of the screen.

If more than one type of income is reported by IRS for the individual, the message “More Data Available” is displayed at the bottom of the screen. Press Enter to access the additional information. The system continues to display available information when Enter is pressed. When all information has been accessed, the message “Inquiry Complete” will display at the bottom of the screen. Press Enter to return to the first page of the IIRS screen.

NOTE: The message “Do Not Print This Screen” displays at the bottom of each screen. This is an IRS security requirement. DO NOT PRINT THIS SCREEN.

Known income information:

For income reported on the IIRS screen that is already known to the case record, take the following steps:

1. After viewing the unearned income information and comparing it to information in the case record, type “X” in the Verify field above the payee's SSN for information known to the case. Press Enter
2. The system displays the current date in the Date field after the Enter key is pressed.

New (Unknown) Income Information:

For income reported on the IIRS screen that is not known to the case record, system- generated IEV-6 and IM-6 letter(s) must be requested. (The IEV-6 is a form telling the recipient that income has been reported to FSD.)

After viewing all available unearned income, the worker takes the following steps to generate IEV-6 and IM-6 letters:

1. Return to the first IIRS screen;
2. Type “6” to the left of the case ID for each case requiring income verification.
3. Press Enter. The request date for the letters displays to the right of the individual status.
4. A second page listing all incomes for the individual will display. Each source of income includes the income source (payer), tax year, amount, and income type.
5. 4Enter the pay county number and load number to be printed on the IEV-6 and IM-6 letters.
6. Select the unearned income(s) to be printed on the IEV-6/IM-6 letters by typing “X” to the left of payer's name. Even if only one payer is listed, it is necessary to type the “X” to generate the letters. Press Enter.

The system will generate and send one IEV-6 listing all the types of assistance and all unearned incomes selected. Along with the IEV-6, the system will generate a separate IM-6 for each type of unearned income selected.

NOTE: There is a maximum of three unearned incomes per IEV-6 letter. If more than three unearned income types are selected, the system will send additional IEV-6.

Each IEV-6 “packet” contains:

• An IEV-6 that includes:
  • the payee's name, address and the tax year,
  • up to three payer's names, addresses and income types, and
  • a 30-day deadline date for the client to either contact the worker or sign and return the IM-6 form(s)
• Up to three IM-6(s) which lists the payer's name and address; and
• A return envelope.

NOTE: If some of the unearned income is known to the case but some is new, the worker selects only the new information.

Copies of the IEV-6 and the IM-6(s) are sent to the caseworker for tracking purposes. DO NOT file the letters in the recipient's case record. This information is confidential and must be kept by the county office under lock and key. Destroy the letters when the recipient returns the requested information. If the case is closed due to failure to cooperate with the IRS match, the IEV-6 and IM-6 copies must be kept for 90 days. If a hearing is requested, the copies of the letters must be kept by the county until the hearing decision is reached.

Recipient Response/Non-Response:

If the client responds to the IEV-6, by either contacting the worker or returning signed IM-6(s), complete the investigation of the income and resource. If the income results in a reduction of benefits or termination of the case, the county must send the client an Adverse Action Notice (IM-80 or FA510) to reduce or terminate benefits.

If the recipient does not respond to the IEV-6, use the IIRS screen to request a system- generated IEV-80 for the appropriate type of assistance, taking the following steps:

1. Return to the original IIRS screen.
2. Type “80” to the left of the case ID for each case requiring an Adverse Action Notice.
3. Press Enter. The request date for the IEV-80 displays to the right of the individual status.

It is not necessary to select a type of unearned income for the IEV-80. Note in the case record the date the information was requested and the date the IEV-80 was requested.

The system will generate and send an IEV-80 listing all the types of assistance selected. The reason for the action given on the letter reads: “You did not cooperate in providing information requested of you regarding your unearned income (7CFR 273.2 (f) (9) and or 45CFR 205.56).”

A copy of the IEV-80 will be sent to the caseworker for tracking purposes and closing action. File the IEV-80 in the case record.

NOTE: An IEV-06 and an IEV-80 cannot be requested at the same time.

Closing for Non-Response:

The system does not close the case(s) when the IEV-80 expires. Workers are required to close the case using standard closing procedures, as follows:

• For FAMIS Cases:
  • Go to “Select Authorization”(FM3G),
  • Select the appropriate case, and press F18=Add Authorization,
  • Enter WICL in the Action field, and IRS in the Reason field,
  • Make comments as to why the action is being taken, eliminating reference to an IRS match.
    
    
• For Legend Cases:
  Send the appropriate closing letter, using the same reason for the closing as stated above: “You did not cooperate in providing information requested of you regarding your unearned income (7CFR 273.2 (f) (9) and or 45CFR 205.56).”

Confidentiality/Security Issues

All information reported by IRS is considered confidential. Access to federal tax information must be strictly on a “need to know” basis. Copies of letters containing information on unearned income reported by IRS may not be maintained in case records or shared with any one except:

• The client,
• The client's representative as authorized by the client,
• The clerk who is responsible for maintaining the locked file of IEV-6 and IM-6 forms,
• The supervisor,
• The third party that reported the income.

When the IRS data is verified by a third party, the verification is to be recorded in the case file. Once the third party verification is received, normal confidentiality rules apply as the information is now normal case information, not IRS information and must not be identified as IRS information in any way. Workers must treat the information in the ways noted below in order to maintain IRS/FSD confidentiality rules:

• The IRS notification the worker receives:
  • For FAMIS Cases -- The alert notifying the worker that IRS information needs to be reviewed does not contain any IRS income amounts or sources, and is not subject to IRS confidentiality requirements.
  • For Legend Cases -- The IRS information is made available to the worker via e-mail, does not contain any IRS income amounts or sources, and is not subject to IRS confidentiality requirements.
    
    
• The IIRS screen contains confidential information. Do not print the IIRS screen and do not discuss the IRS data with anyone except those listed above.
  
  
• The copies of the IEV-6 and IM-6 letters are considered confidential and must be kept locked in the county office until the income investigation is completed, and then destroyed. DO NOT KEEP COPIES OF THE IEV-6 or IM-6 IN THE CASE RECORD.
  
  
• The system-generated IEV-80 does not contain any IRS income amounts or sources and is not subject to IRS confidentiality requirements. This form may be filed in the case record.

IRS Inspections of County Offices

In addition to inspection by the state office security staff, county offices may also be inspected by IRS District Security personnel. If an inspection request is made, identify the individual requesting entry before allowing him into your office to view IRS data. If there are questions regarding your responsibility in the area of confidentiality of IRS data, please contact Gregory Hunt at 573-526-2164.

NECESSARY ACTION:

• Review this material with all staff responsible for handling IRS matches.

ATTACHMENT:

• IRS Income Code Chart

LH