106-2 IRS UNEARNED INCOME MATCH
The Internal Revenue Service (IRS) has an agreement with the Department of Health to provide unearned income data on public assistance clients whose Social Security numbers match with their information. The unearned income data, such as interest from a savings account, can reveal previously unknown resources. The Division is required by law to use IRS-matched data in determining eligibility for Temporary Assistance and Medicaid. The interface excludes households only participating in SNAP.
DPA provides monthly reports containing the names and SSNs of applicants and recipients to the IRS. The IRS matches this information to their records and returns the matched information. Each month, the Office of Information Technology runs a job using the report to update the Eligibility Information System (EIS) interface, and the interface generates alerts for matches with new payment data. It provides only alerts. Inquiries are not permitted.
DPA informs all households of the existence of this data exchange on the public assistance application form, review recertification application form, and on the back of all EIS notices. The IRS information is the basis for seeking verification of past and current unreported income or resources.
The IRS / BEERS Eligibility Guide provides specific instructions for processing and safeguarding IRS (and BEERS) information. The purposes of section 106-2 is to give all staff a general overview of the process, an understanding of what will and will not appear in EIS records, and to meet the federal requirement to inform all DPA staff of the penalty for unauthorized disclosure of IRS (and BEERS) interface information.
106-2 B. CONFIDENTIALITY AND DISCLOSURE OF INFORMATION
The EIS Security Officer controls access to the IRS interface and only allows access by one authorized PIA employee assigned the task of processing IRS alerts for redetermining eligibility and benefits for the Temporary Assistance and Medicaid programs. The IRS information displays on a screen separate from all other interface information.
Note:
The Program Integrity & Analysis (PIA) and the Office of Information Technology (OIT) authorized employees must have a background check and fingerprinting completed. The background investigation is used for the sole purpose of allowing access to Federal Tax Information (FTI), not whether or not the employee is fit for employment.
Federal tax return data contained in the IRS (and BEERS) interface is highly confidential. It cannot be copied by mechanical or manual means. It cannot be printed, faxed, or sent by email. All tax return information must be kept secure for a period of five years.
Each employee with access to federal tax information must complete an annual disclosure awareness training for safeguarding federal tax information, sign the IRS disclosure awareness statement at least once a year, and wear an identification badge or credentials.
Employees that do not have access to Federal Tax Information, but work in the same general area this information is transmitted, must also wear an identification badge or credentials.
Individuals have the right to information about their own tax records. The PIA employee authorized to review the alerts may identify the source of the match information only to the applicant or recipient (excluding the spouse), or authorized representative.
The Division of Public Assistance also may disclose IRS (and BEERS) interface information to our federal oversight agencies: the Administration for Children and Families, Food and Nutrition Services, and Centers for Medicare & Medicaid Services. Such disclosures may be made only in the course of the administration of the federally funded public assistance program. No other agencies may have access to the interface information.
At the conclusion of the eligibility and benefit redetermination, the PIA employee will destroy all records unless eligibility or the benefit changes. If the PIA employee changes the benefit or determines ineligibility on a case, they will retain electronic files in accordance with federal record retention requirements.
All Division employees must abide by the safeguarding rules set out in this section. Unauthorized disclosure of federal tax information is a felony punishable by a fine in any amount not to exceed $5,000, or imprisonment of not more than 5 years, or both, together with the cost of prosecution. Unauthorized inspection of federal tax information is a misdemeanor punishable by a fine not to exceed $1,000, or imprisonment of not more than 1 year, or both, together with the costs of prosecution. Those convicted of either unauthorized inspection or disclosure would also be subject to civil penalties, which would be the greater of $1,000 for each act or the sum of the actual damages sustained by the plaintiff, plus punitive damages and the cost of the civil action.
106-2 D. IRS MATCHES - GENERAL RESPONSIBILITIES
If the IRS information is unknown to the Division, then the PIA employee assigned to IRS alert processing must independently verify any IRS information that may be relevant to the federally funded programs.
When a match occurs, the authorized employee assigned to IRS alert processing has 45 days from the "receive date" shown on the interface to obtain independent verification and complete the appropriate action. No action may be taken to suspend, deny, terminate, or reduce benefits without first providing the client with at least 10 days to verify the matched information.
The authorized employee assigned to the IRS alert processing will make notes on the CANO screen in EIS. The notes may not include the specifics of the verification research, but will indicate that he or she is following up on an IRS alert for verification.
106-2 E. RESPONSIBILITY FOR PROVIDING VERIFICATION
The applicant or recipient is responsible to respond to the request for verification and to provide the verification to the authorized employee processing the IRS alert. If the client indicates that he or she is unable to obtain verification, then the authorized employee must require the client to complete a release of information form, and then must pursue the information.
106-2 F. RECEIPT OF REQUESTED MATCH VERIFICATION
Upon review of the verification submitted to redetermine eligibility, the authorized employee responsible for processing the IRS alert will document the result of the redetermination on the CANO.
106-2 G. IRS MATCH DENIAL/CLOSURE CODE ON EIS
The IRS Interface denial/closure codes (IR or IP for IRS, and BI or BN for BEERS) will be used when denying or closing a case as a result of information received from an IRS interface match. This includes closures for failure to provide information requested in order to verify an IRS interface match, as well as denials or closures that result from follow-up on an alert.
The authorized employee assigned to processing IRS alerts will complete the claim determination form. Details from the alert may not be copied or attached to the form.
The authorized employee assigned to processing the IRS alerts must attempt to obtain third party verification of IRS match information before submitting a Fraud Complaint Report form. The specific match information will not be written on the referral form. Verification from a third party will be added to the referral.
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