Prepare to Receive a Social Security Administration No-Match Letter

Kirsch CPA Group

Oct 15, 2019

The SSA explains that it’s seeking to reconcile discrepancies between the names and Social Security Numbers (SSNs) it has on file with the names and SSNs that employers report. The purpose isn’t to support enforcement of immigration law, but rather to “properly post employees’ earnings to the correct record.” That’s an important distinction because if you confused such a letter with, for example, a “tentative non-confirmation” red flag coming from the Department of Homeland Security’s E-Verify system, you might unintentionally take an action that would get you into trouble.

In other words, you shouldn’t take any adverse action (for example, a suspension or termination) against any employees who provided inaccurate information. You may suspect the worker gave you someone else’s SSN because he or she doesn’t have a legitimate SSN, but taking the matter into your own hands could inadvertently violate state and federal nondiscrimination laws.

Discrepancy Sources

The letter SSA is sending to many employers is non-threatening even humble, in tone. “There are a number of reasons why reported names and SSNs may not agree with our records, such as typographical errors, unreported name changes, and inaccurate or incomplete employer records,” it explains. The letter also stresses that receiving the letter “does not imply that you or your employee intentionally gave the government wrong information… and does not address your employees’ work authorization or immigration status.”

The letter itself won’t identify employees whose SSNs listed on their W-2s forms don’t agree with SSA records. To get those details, you’ll need to register on an SSA website known as Business Services Online (www.socialsecurity.gov/bso/bsowelcome.htm) and go to the “employer report status” page. If the discrepancy resulted from a clerical error on your part and you have a correct SSN on file from the employee you can fix that error on the portal by completing a W-2C form (a Corrected Wage and Tax Statement). You’ll be asked to do that within 60 days of receiving the letter.

Questions Answered

The SSA offers some tips on what to do if you receive one of these letters. Here’s a sampling:

Q: What should I do if my employee’s name and SSN don’t match IRS records?

A: Check to see if your information matches the SSN on the employee’s SS card. If it doesn’t match, ask your employee to provide you with the exact information as it is shown on the employee’s SS card.

Q: What if the information I have provided on the employee’s W-2 matches the information on the employee’s SS card?

A: Ask your employee to check with any local SS office to resolve the issue or call 1-800-772-1213.

Q: How can employees change or correct their names on their SSN cards?

A: An employee who legally changed his or her name due to marriage, divorce, court order, or any other reason, must tell the SSA so a corrected card can be issued.

Penalty Hazard

The SSA posed a question likely to be on the minds of employers who got a no-match letter, then punted. The question: “Will I get penalized by the IRS for having an incorrect SSN on a Form W-2?” The answer, which may seem unsatisfactory, was that “the IRS is responsible for any penalties associated with the Form W-2.” (You can learn more about the rules the IRS applies by checking IRS Publication 1586.)

Going forward, the SSA is encouraging employers to take advantage of its free SSN Verification Service to reduce the chances of a non-match in the future. It’s available through the SSA’s Business Service Online web portal mentioned above.
The SSA doesn’t have the legal authority to compel you to do anything in response to a no-match letter. However, the agency that does have enforcement teeth — the Department of Homeland Security’s Immigration and Customs Enforcement agency (ICE) — will take note if you fail to respond to the SSA and may conduct an I-9 audit. Following up on a no-match letter from SSA could demonstrate to ICE examiners that you have acted in good faith.

You can show further evidence of good faith by checking with employees who need to get in touch with the SSA to resolve any discrepancies, to find out whether the matter was indeed resolved.

With any luck, discrepancies will just be the consequence of an innocent clerical error on someone’s part. If not and the discrepancy cannot be resolved, it might be prudent to seek expert legal advice.

Do you have questions about the no-match letter or want more information? Contact Kirsch CPA Group at 513.858.6040 to help.