Posted: Mon Aug 30, 2010 07:53 pm Post subject: Unsual Overpayment Case
I have an odd overpayment case I am handling gratis for a former client. In a nutshell, SSA maintains that the client was paid disability checks for time period x through y, (over 10 years ago), and she maintains that she never got checks for that time period. (Time period is pre-direct deposit days). Through the appeal process, the district office tried to get copies of the cancelled checks but Treasury said that they were not available. I am suspicious that are not available because they simply do not exist.
1099s for the time period, however, reflect that she was indeed paid, and this is the basis for the DO sticking with the overpayment allegation. Her tax returns do not, however, reflect the income reflected on the 1099s. And the IRS has never come back to her with questions about the fact that 1099 amounts were not included on income tax returns. The client is going to be providing me with back bank statements, but I sure would appreciate any ideas on how I prove this negative.
I will add however that if SSA claims that they identified the overpayment and notified the beneficiary within the 4 year time-frame (but they were unable to collect because the checks were stopped) there is virtually no statute of limitations on collection.
Posted: Mon Aug 30, 2010 11:47 pm Post subject: Re: Unsual Overpayment Case
DrDemose wrote:
I have an odd overpayment case I am handling gratis for a former client. In a nutshell, SSA maintains that the client was paid disability checks for time period x through y, (over 10 years ago), and she maintains that she never got checks for that time period. (Time period is pre-direct deposit days). Through the appeal process, the district office tried to get copies of the cancelled checks but Treasury said that they were not available. I am suspicious that are not available because they simply do not exist.
1099s for the time period, however, reflect that she was indeed paid, and this is the basis for the DO sticking with the overpayment allegation. Her tax returns do not, however, reflect the income reflected on the 1099s. And the IRS has never come back to her with questions about the fact that 1099 amounts were not included on income tax returns. The client is going to be providing me with back bank statements, but I sure would appreciate any ideas on how I prove this negative.
If the PHUS records show the payments were issued, I have no doubt that this was the case. The fact that the paper copies of the check can't be located is not in any way an SSA issue - it is strictly a Treasury Department issue. They don't PRESENTLY exist because it has always been the policy of the Treasury Department to destroy all paper canceled checks over 6 years old with absolutely no exceptions.
Have you requested that SSA try to locate the prior disability folder? If it can be located, you will have applications with the recipient's signature as proof that she filed, and tons of various types of paper forms showing the various addresses where SSA sent letters (and presumably benefit checks). Your client should be able to verify to you whether she lived at any of those addresses. You may also find copies of the overpayment notices and subsequent collection notices. And, if she ever had a duplicate check negotiation overpayment, the check photocopies for those checks might even be in the folder. At least this would give you a good idea as to whether your client is being truthful with you and not just yanking your chain. It might also answer the question as to whether a representative payee was involved.
If SSA can't produce the folder (and this very likely could be the case given the agency's idiotic policy of eventually destroying all inactive folders, including those with outstanding overpayments) and SSA can't produce the checks, I'd say they have no grounds to establish fault on the part of your client in causing the overpayment - they can't even prove your client filed a claim. File a waiver request, let them deny it, then proceed on to hearing. The ALJ will almost certainly have to waive the overpayment based upon lack of evidence. You could also try to appeal the fact of the overpayment by filing a request for reconsideration along with a good cause for late filing statement. However, I suspect that the request will be dismissed administratively as not being timely and you don't have any avenues to appeal such a dismissal.
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