Social Security # & Name Verification
cbcolorado
11 Posts
Does anyone have advice/guidelines on how to verify ss #'s and names of employees so as not to be assessed fines for employment of inelible employees?(Our controller attended a Social Security Seminar and was told from now on, employers could be fined $50 per ineligible employee). It is my understanding it is optional for applicants to provide their ss # on their application and even if they do, you cannot check ss #'s before making an offer of employment. Realistically, an employee could work a day or two (therefore earn wages and receive a W-2)before we find out their ss # and name don't match or that the ss # is invalid. Appreciate any feedback!
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Failure to Correctly Record Social Security Numbers Can Result in Administrative Penalty
Recently the Social Security Administration has noticed an increase in the number of incorrect social security numbers being submitted. The Internal Revenue Service has also noticed this increase in incorrect numbers and has indicated that it will start levying administrative fines on employers for incorrect social security numbers.
What must an employer do?
Employers must obtain each employee's name and SSN for W2 forms. This also applies to resident aliens. Even though the IRS may issue an alien an individual taxpayer identification number (ITIN), possession of an ITIN does not change an individual's employment or immigration status under U.S. law. An employer should not accept an ITIN in place of an SSN for employee identification. An individual with an ITIN who later becomes eligible to work in the United States must obtain an SSN.
So what happens when an employer enters an incorrect social security number?
The employer will receive a notice from the Social Security Administration that the employee’s social security number does not match the information in its database. The Social Security Administration is generous to the employer – it will give the employer 60 days to fix the problem.
Sometimes it can be something as simple as a typographical or transcription error or a change of name (for example because of marriage or divorce). Sometimes it's because the employee has provided a mismatched or invalid number and in those cases as soon as the employer asks the employee about the number, the employee never shows up to work again. That obviously represents a waste of the employer's resources, given all the effort that goes into hiring and training new employees.
Before taking action against an employee whose social security number doesn’t match their name, make sure to get the employee’s side of the story. The Social Security Administration cautions employers that the fact that a number doesn't match its records doesn't imply that the employee intentionally provided incorrect information or anything about the employee's immigration status and shouldn't be a basis, in and of itself, for taking adverse action.
Hopefully, the number will get corrected, and that will be the end of the issue. But in some cases the Internal Revenue Service may get involved. The IRS has the right to levy a $50 administrative fine against the employer for each incorrect social security number.
How can this problem be avoided?
The Social Security Administration provides a free service that lets employers verify that the social security number matches the employee’s name before the employer submits the W-2. To use the “Employee Verification Service" (EVS) the employer should have the following information available: SSN, last name, first name, middle initial (if any), date of birth, and gender. With that information, the employer can check up to five names by calling the Social Security Administration at (800) 772-6270. The employer can check up to 50 names by submitting a paper list with all the information to the local social security office. To check a large volume of names, the employer can set up an account with the Social Security Administration. To learn how, visit the administration’s website at [url]www.ssa.gov[/url] or call the EVS Information Line at 410-965-7140.
In addition, the IRS provides the following advice:
Record the name and number of each employee exactly as they are shown on the employee's social security card. If the employee's name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a new card from the Social Security Administration. Continue to report the employee's wages under the old name until he or she shows you an updated social security card with the new name.
If your employee was given a new social security card to show his or her correct name and number after an adjustment to his or her alien residence status, correct your records and show the new information on Form W-2. If you filed Form W-2 for the same employee in prior years under the old name and SSN, file Form W-2c to correct the name and number. Advise the employee to contact the local Social Security Administration office about 9 months after the Form W-2c is filed to ensure that his or her records have been updated.
An employer may, but is not required to, photocopy the social security card if the employee provides it. (Please note, that if the employee provides sufficient proof his or her right to work in the United States and provides a social security number, the employer cannot refuse to hire the employee because the employee is unable to produce a social security card.)