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Social Security Agency Corrects 2.9 Million Miscalculated Tax Forms By Avrum Lank Jan. 18, 2008 (Milwaukee Journal Sentinel) MILWAUKEE - The Social Security Administration has supplied the wrong tax information to about 2.7 million Americans and is spending about $1 million to correct the problem, an agency official said Wednesday. The incorrect data was contained on some 1099-SSA forms sent out earlier this month, said Mark Lassiter, spokesman for the agency in Baltimore. The 1099s are sent to all persons who receive Social Security benefits, reporting how much they received during the year. That information is needed to fill out income tax returns. The Internal Revenue Service receives copies of the 1099s, which are matched to returns by computer. Corrected forms will be sent to all affected Social Security recipients and to the IRS by the end of the month, Lassiter said. Because corrected information is on the way, he said the Social Security Administration decided not to tell the public about the mistake until asked about it by a reporter. The bad forms over-reported the amount of benefits received by some Social Security beneficiaries who purchase Medicare Advantage or prescription drug plans under Social Security parts C and D, Lassiter said. The incorrect information is in Box 3 of the form, "Benefits Paid." In some cases, Social Security computers preparing the 1099s included premiums for those plans paid in 2006 as part of benefits received in 2007, leading to the error, Lassiter said. In all, the Social Security Administration sent out about 57 million 1099-SSAs. Florida had the most, 196,742, followed by Texas at 188,361, California, 157,288, and Illinois, 124,707. Lassiter said he did not know how much extra income was reported in total. In the case of Karen A. Johnson, 67, of Menomonee Falls, Wis., the error was $57. Johnson, 67, a retired high school math and computer science teacher, has her Social Security benefits deposited directly to a bank account and noticed the error when comparing the 1099 to her records. "I have my stuff in Quicken," she said, referring to the computerized personal accounting and tax preparation program. "I usually check to make sure I have the right numbers. When they disagreed, I checked to see where the problem was." Comparing the 1099 to other records is a good thing to do before filing a return, experts said. When she noticed the error, Johnson contacted a local Social Security office, where she was told of the larger problem. Johnson said she has not yet filed her taxes because she is waiting for additional information from other sources. Anyone who has used information on a 1099-SSA to file a return already and then receives a new 1099 should amend the return, said Michael E. Friedman, a lawyer and certified public accountant with Scribner Cohen & Co. in Milwaukee. "A lot of times when 1099s don't match up, the IRS will send you a letter asking for an explanation," said Craig Zetley, a lawyer and CPA with Zetley & Cohn in Milwaukee. "It might end there if you send in the explanation, or it might end up in somebody looking at your return for other issues." |
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