The Internal Revenue Service (IRS) and the Social Security Administration (SSA) are two distinct government agencies with specific responsibilities related to tax administration and social security benefits, respectively. While both agencies maintain the confidentiality of taxpayer information, there are certain circumstances under which they may share information with each other. This article explores the legal framework governing the disclosure of tax information between the IRS and SSA.
Legal Basis for Information Sharing
The Internal Revenue Code (IRC) Section 6103 generally prohibits the release of tax information by IRS employees. However, there are exceptions to this rule that allow the IRS to share information with the SSA under certain conditions:
- IRC Section 6103(l)(1): This provision authorizes the IRS to disclose tax information related to taxes imposed under chapters 2, 21, and 24 to the SSA. Chapter 2 relates to self-employment income, Chapter 21 concerns Social Security and Medicare (FICA) tax, and Chapter 24 deals with income tax withholding.
Purpose of Information Sharing
The primary purpose of information sharing between the IRS and SSA is to facilitate the administration of Social Security and Medicare programs. The IRS may disclose tax information to the SSA to:
- Establish a taxpayer’s liability for Social Security and Medicare taxes
- Determine eligibility for Social Security benefits
- Combat fraud and abuse in Social Security programs
Limitations on Information Sharing
The IRS is prohibited from disclosing tax information to the SSA for any purpose other than those authorized by law. SSA employees who receive this information are bound by the same confidentiality rules as IRS employees and cannot disclose it to state Social Security Administrators (SSSAs), state officials, or other federal agencies without authorization.
Disclosure Procedures
To obtain tax information from the IRS, the SSA must submit a written request signed by an official designated to request tax information. The IRS may also disclose tax information to the SSA in the course of official tax administration investigations if necessary to obtain information that is not otherwise reasonably available.
Taxpayer Representation
Taxpayers may authorize a representative, such as an attorney or accountant, to represent them before the IRS and SSA. This authorization can be granted through a Power of Attorney (Form 2848) or a Tax Information Authorization (Form 8821). These forms allow the representative to access confidential tax information and participate in discussions with the IRS and SSA on the taxpayer’s behalf.
The IRS and SSA share tax information under specific legal provisions to facilitate the administration of Social Security and Medicare programs. While the confidentiality of taxpayer information is generally maintained, there are exceptions that allow for limited disclosure for authorized purposes. Taxpayers should be aware of these exceptions and may consider authorizing a representative to protect their interests in any interactions with the IRS or SSA.
Does Social Security Disability Share Information with the IRS?
FAQ
Does IRS have anything to do with Social Security?
Does Social Security report income to IRS?
What information does the IRS share?
What personal information does the IRS have access to?
Can the IRS disclose my tax information to SSA?
The IRS may therefore share information with SSA about Social Security and Medicare tax liability if necessary to establish the taxpayer’s liability. This provision does not allow the IRS to disclose your tax information to SSA for any other reason.
Are Social Security benefits taxable?
They don’t include supplemental security income (SSI) payments, which aren’t taxable. The net amount of social security benefits that you receive from the Social Security Administration is reported in Box 5 of Form SSA-1099, Social Security Benefit Statement, and you report that amount on line 5a of Form 1040, U.S. Individual Income Tax Return.
Do you owe taxes on social security?
According to the IRS, the best way to see if you’ll owe taxes on your Social Security income is to take one-half of your Social Security benefits and add that amount to all your other income. This includes tax-exempt interest. This number is known as your combined income, and this is how it’s calculated:
Do I have to report my wages if I receive SSI?
Report your wages if you work and receive Social Security disability insurance or Supplemental Security Income (SSI) benefits. If you’re a noncitizen who lives outside of the United States and you received or repaid Social Security benefits last year, we will send you form SSA-1042S in the mail.