Social Security Numbers
Coordinated Approach to SSN Data Could Help Reduce Unauthorized Work Gao ID: GAO-06-458T February 16, 2006To lawfully work in the United States, individuals must have a valid Social Security number (SSN) and, if they are not citizens, authorization to work from the Department of Homeland Security (DHS). Noncitizens seeking work must provide both an SSN and evidence of work authorization to their employer. Yet individuals without these required authorizations have gained employment with false information. How these instances of unauthorized work can be identified or prevented challenges the federal agencies involved. Congress asked GAO to discuss how federal agencies can better share reported earnings data to identify unauthorized work. Specifically, this testimony addresses two issues: (1) the Social Security data that could help identify unauthorized employment and (2) coordination among certain federal agencies to improve the accuracy and usefulness of such data.
The Social Security Administration (SSA) has two types of data that could be useful to reducing unauthorized work--individual Social Security records and earnings reports. Individual Social Security records, which include name, date of birth, and SSN, are used by SSA to provide verification services to employers wishing to assure themselves that the names and SSNs of their workers match SSA's records. SSA also uses Social Security records in a work authorization verification system developed by DHS called the Basic Pilot that offers electronic verification of worker status. These services are voluntary, and none are widely used by employers. SSA's earnings records provide additional information, which could be used as an enforcement tool to identify unauthorized work. Currently, SSA uses such records to produce two relevant files based on earnings records, which are the Nonwork Alien File and the Earnings Suspense File (ESF). The Nonwork Alien File contains earnings information posted to SSNs issued for nonwork purposes, suggesting that these individuals are working without authorization. The ESF contains earnings reports for which SSA is unable to match the name and SSN of the worker, suggesting employer error, SSN misuse, or unauthorized work activity. In addition, we have reported that the ESF, which contained roughly 250 million records as of December 2004, appears to include an increasing number of records associated with probable unauthorized work, but because of statutory constraints, the ESF is not available to DHS as an enforcement tool. Improving the usefulness of SSA data could help identify unauthorized work and ensure that limited enforcement resources are targeted effectively. Ensuring that the most useful data are available requires close coordination among the three federal agencies involved in collecting and using the data--SSA, the Internal Revenue Service (IRS), and DHS. We have previously recommended that IRS work with DHS and SSA as it considers strengthening its employer wage reporting regulations, as such action could improve the accuracy of reported wage data, and that DHS, with SSA, determine how best to use such wage data to identify potential illegal work activity. Efforts to improve data will only make a difference, however, if agencies work together to improve employer reporting and ensure they can conduct effective worksite enforcement programs.
GAO-06-458T, Social Security Numbers: Coordinated Approach to SSN Data Could Help Reduce Unauthorized Work
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Testimony before the Subcommittees on Social Security and on Oversight,
Committee on Ways and Means,
House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EST:
Thursday, February 16, 2006:
Social Security Numbers:
Coordinated Approach to SSN Data Could Help Reduce Unauthorized Work:
Statement of Barbara D. Bovbjerg, Director:
Education, Workforce, and Income Security Issues:
GAO-06-458T:
GAO Highlights:
Highlights of GAO-06-458T, a report to the Chairmen, Subcommittees on
Social Security and on Oversight, Committee on Ways and Means, House of
Representatives:
Why GAO Did This Study:
To lawfully work in the United States, individuals must have a valid
Social Security number (SSN) and, if they are not citizens,
authorization to work from the Department of Homeland Security (DHS).
Noncitizens seeking work must provide both an SSN and evidence of work
authorization to their employer. Yet individuals without these required
authorizations have gained employment with false information. How these
instances of unauthorized work can be identified or prevented
challenges the federal agencies involved.
The subcommittees asked GAO to discuss how federal agencies can better
share reported earnings data to identify unauthorized work.
Specifically, this testimony addresses two issues: (1) the Social
Security data that could help identify unauthorized employment and (2)
coordination among certain federal agencies to improve the accuracy and
usefulness of such data.
What GAO Found:
The Social Security Administration (SSA) has two types of data that
could be useful to reducing unauthorized work”individual Social
Security records and earnings reports. Individual Social Security
records, which include name, date of birth, and SSN, are used by SSA to
provide verification services to employers wishing to assure themselves
that the names and SSNs of their workers match SSA‘s records. SSA also
uses Social Security records in a work authorization verification
system developed by DHS called the Basic Pilot that offers electronic
verification of worker status. These services are voluntary, and none
are widely used by employers. SSA's earnings records provide additional
information, which could be used as an enforcement tool to identify
unauthorized work. Currently, SSA uses such records to produce two
relevant files based on earnings records, which are the Nonwork Alien
File and the Earnings Suspense File (ESF). The Nonwork Alien File
contains earnings information posted to SSNs issued for nonwork
purposes, suggesting that these individuals are working without
authorization. The ESF contains earnings reports for which SSA is
unable to match the name and SSN of the worker, suggesting employer
error, SSN misuse, or unauthorized work activity. In addition, we have
reported that the ESF, which contained roughly 250 million records as
of December 2004, appears to include an increasing number of records
associated with probable unauthorized work, but because of statutory
constraints, the ESF is not available to DHS as an enforcement tool.
Improving the usefulness of SSA data could help identify unauthorized
work and ensure that limited enforcement resources are targeted
effectively. Ensuring that the most useful data are available requires
close coordination among the three federal agencies involved in
collecting and using the data”SSA, the Internal Revenue Service (IRS),
and DHS. We have previously recommended that IRS work with DHS and SSA
as it considers strengthening its employer wage reporting regulations,
as such action could improve the accuracy of reported wage data, and
that DHS, with SSA, determine how best to use such wage data to
identify potential illegal work activity. Efforts to improve data will
only make a difference, however, if agencies work together to improve
employer reporting and ensure they can conduct effective worksite
enforcement programs.
www.gao.gov/cgi-bin/getrpt?-GAO-06-458T. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact Barbara Bovbjerg at (202) 512-7215 or
bovbjergb@gao.gov.
[End of section]
Messrs. Chairmen and Members of the Subcommittees:
I am pleased to be here today to discuss Social Security numbers (SSNs)
and their use in preventing and detecting unauthorized work. To
lawfully work in the United States, individuals must have a valid SSN
and, if they are not citizens, authorization to work from the
Department of Homeland Security (DHS). Noncitizens seeking work are
required to provide both an SSN and evidence of work authorization to
their employers. Yet individuals without these required authorizations
can gain employment with false information. How these instances of
unauthorized work can be identified or prevented challenges the federal
agencies involved.
In prior GAO work on these issues, we have reported on the use of
Social Security Administration (SSA) data for identity and employment
eligibility verification. Although SSA's verification systems have
improved, use of SSA information in worksite enforcement continues to
be challenging. Today I will discuss two issues: (1) the Social
Security data that could help identify some unauthorized employment and
(2) coordination among SSA, DHS, and the Internal Revenue Service (IRS)
to improve the accuracy and usefulness of such data.
My statement is based primarily on prior GAO work on these
topics.[Footnote 1] We are presently conducting additional work for
these subcommittees examining the use of SSA data for detecting
unauthorized work. To determine how SSA and DHS are coordinating to
improve earnings data, we conducted interviews with officials from SSA,
the SSA Office of the Inspector General, and DHS. In addition, we
obtained and reviewed data from SSA on individuals who had reported
earnings under a nonwork SSN, and we reviewed other documentation
provided to us by these agencies. We began this review in October 2005
in accordance with generally accepted government auditing standards,
and our work is ongoing.
In summary, SSA has two types of data that could be useful for
addressing unauthorized work--Social Security records for individuals
and earnings reports. Individual Social Security records include name,
date of birth, and SSN, among other things. SSA uses these data to
provide SSN verification services free of charge to employers wishing
to assure themselves that the names and SSNs that their workers
provided match SSA's records. SSA also uses Social Security records in
a work authorization verification system called the Basic Pilot program
developed by DHS, which offers electronic verification of worker
status. These systems are voluntary and not widely used by employers.
SSA's earnings records provide a different sort of information that
could be used for identifying unauthorized work. SSA uses such records
to produce two relevant files. SSA's Nonwork Alien File contains
earnings reports that are posted to SSNs that were issued for nonwork
purposes, which suggests individuals are working without DHS work
authorization. By law, SSA provides nonwork alien information to DHS
annually, and our ongoing work for you suggests that a number of these
records are associated with people who became work authorized some time
after receiving their nonwork SSNs. A second file of interest, the
Earnings Suspense File (ESF), contains earnings reports in which the
name and SSN do not match SSA's records.[Footnote 2] We have reported
that this file, which contained 246 million records as of November
2004, appears to include an increasing number of records associated
with unauthorized work.[Footnote 3]
Improving the usefulness of SSA data could help identify some
unauthorized work and ensure that limited enforcement resources are
targeted effectively. Ensuring that the most useful data are available
requires close coordination among the three federal agencies involved
in collecting and using the data--SSA, IRS, and DHS. We have previously
recommended that IRS work with DHS and SSA as it considers
strengthening its employer wage reporting regulations, as such action
could improve the accuracy of reported wage data, and that DHS, with
SSA, determine how best to use such wage data to identify potential
illegal work activity.
Background:
The Social Security Act of 1935 authorized the SSA to establish a
record-keeping system to help manage the Social Security program and
resulted in the creation of the SSN. SSA uses the SSN as a means to
track workers' earnings and eligibility for Social Security benefits.
Through a process known as enumeration, each eligible person receives a
unique number, which SSA uses for recording workers' employment history
and Social Security benefits. SSNs are routinely issued to U.S.
citizens, and they are also available to noncitizens lawfully admitted
to the United States with permission to work. Lawfully admitted
noncitizens who lack DHS work authorization may qualify for an SSN for
nonwork purposes when a federal, state, or local law requires that they
have an SSN to obtain a particular welfare benefit or service. In this
case, the Social Security card notes that the SSN is "Not Valid for
Employment."[Footnote 4] As of 2003, SSA had assigned slightly more
than 7 million nonwork SSNs. Over the years, SSA has tightened the
requirements for assigning nonwork SSNs.
In 1986, Congress passed the Immigration Reform and Control Act (IRCA),
which made it illegal for individuals and entities to knowingly hire
and continue to employ unauthorized workers. The act established a two-
pronged approach for helping to limit the employment of unauthorized
workers: (1) an employment verification process through which employers
are to verify newly hired workers' employment eligibility and (2) a
sanctions program for fining employers who do not comply with the act.
Under the employment verification process, workers and employers must
complete the Employment Eligibility Verification Form (Form I-9) to
certify that the workers are authorized to work in the United States.
Those employers who do not follow the verification process can be
sanctioned.
SSA Individual Records and Earnings Reports Can Identify Some
Unauthorized Work:
SSA has two types of data useful to identifying unauthorized work--
individual Social Security records and earnings reports. Its individual
records, which include name, date of birth, and SSN, among other
things, can be used to verify that a worker is providing the SSN that
was assigned to a person of that name. These records are used in
verification services that are available free of charge to employers on
a voluntary basis. SSA's earnings reports could also be used to
identify some unauthorized work by reporting noncitizens who may have
worked without authorization and employers who have a history of
providing SSN/name combinations that do not match SSA records.
SSA Records Provide Verification Services to Improve Wage Data:
SSA uses individual Social Security records in its Employee
Verification Service (EVS) and the Web-based SSN Verification Service
(SSNVS), which employers can use to assure themselves that the names
and SSNs of their workers match SSA's records. The services, designed
to ensure accurate employer wage reporting, are offered free of charge.
Employer use is voluntary. Although these systems only confirm whether
submitted names and SSNs match, they could help employers identify
workers who provide an SSN with fictitious information.
Over the years, SSA has developed several different verification
methods under EVS. For example, employers may submit lists of workers'
names and SSNs by mail on a variety of media, such as magnetic tapes or
diskettes. Alternatively, employers may call a toll-free number or
present a hard-copy list via fax, mail, or hand delivery to a local SSA
office. SSA verifies the information received from employers by
comparing it with information in its own records. SSA then advises the
employer whether worker names and SSNs match. EVS offers the benefit of
verifying name and SSN combinations for a company's entire payroll.
However, the system would not be able to detect a worker's misuse of
another person's name and SSN as long as the name and SSN matched.
Employers do not widely use this service.
In an attempt to make verification more attractive to employers, in
2005, SSA implemented the Web-based SSNVS. It is designed to respond to
employer requests within 24 hours. Requests of up to 10 worker names
and SSNs can be verified instantaneously. Larger requests of up to
250,000 names can be submitted in a batch file, and SSA will provide
results by the next business day. While this new system is attracting
more employer interest, it is still not widely used.
SSA also uses its records in a work eligibility verification system
developed by DHS called the Basic Pilot, which offers electronic
verification of work authorization for newly hired workers.[Footnote 5]
Use of this program by employers is also voluntary, and the service has
been available nationwide only since December 2004. Employers who agree
to participate must electronically verify the status of all newly hired
workers within 3 days of hire, using information that a new hire is
required to provide. Under this program, an employer electronically
sends worker data through DHS to SSA to check the validity of the SSN,
name, date of birth, and citizenship provided by the worker. SSA
records are used to confirm information on citizens. For noncitizens,
SSA confirms SSN, name, and date of birth, then refers the request to
DHS to verify work authorization status against DHS's automated
records.[Footnote 6] If DHS cannot verify work authorization status for
the submitted name and SSN electronically, the query is referred to a
DHS field office for additional research by immigration status
verifiers. If SSA is unable to verify the SSN, name, and date of birth
or DHS record searches cannot verify work authorization, a tentative
nonconfirmation response is transmitted to the employer. After checking
the accuracy of the information and resubmitting the information, if
necessary, the employer must advise the worker of the finding and refer
him or her to either DHS or SSA to correct the problem. During this
time, employers are not to take any adverse actions against those
workers related to verification, such as limiting their work
assignments or pay. When workers do not contest their tentative
nonconfirmations within the allotted time, the Basic Pilot program
issues a final nonconfirmation. Employers are required to either
immediately terminate employment or notify DHS of their continued
employment.
Like SSA's verification services, the Basic Pilot is voluntary and is
not widely utilized. As of January 2006, about 5,500 businesses
nationwide had registered to participate, although a significantly
smaller number of these are active users.[Footnote 7] Active
participants have made about 4.7 million initial verification requests
over a 5-year period (981,000 requests were made in fiscal year 2005).
DHS reported on actions taken to address weaknesses in the program that
had been identified during the early years of the program. They
included delays in updating immigration records, erroneous
nonconfirmations, and program software that was not user friendly. We
subsequently reported on additional challenges, specifically, the
capacity constraints of the system, its inability to detect identity
fraud, and the fact that the program is limited to verifying work
authorization of newly hired workers.[Footnote 8]
SSA Earnings Data May Be Used to Identify Some Unauthorized Work:
SSA's earnings records can also provide information on unauthorized
work. There are two sets of data that are relevant to unauthorized
work. The first set, the Nonwork Alien File, contains earnings reports
for SSNs that were issued for nonwork purposes. The second set, the
Earnings Suspense File, contains earnings reports in which the name and
SSN do not match. Both could help identify some unauthorized work.
SSA's Nonwork Alien File:
SSA is required by law to provide its Nonwork Alien File to DHS since
it suggests a group of people who are in the United States legally but
may be working without authorization.[Footnote 9] Since 1998, SSA has
provided DHS annual data on over half a million persons with earnings
listed under nonwork SSNs. The file includes annual earnings amounts,
worker names and addresses, and employer names and addresses as well.
DHS has found this file to be of little use to enforcement activities,
however. According to DHS officials, the file is currently not an
effective tool for worksite enforcement due in part to inaccuracies in
the data and the absence of some information that would help the
department efficiently target its enforcement.[Footnote 10]
In fact, because SSA only updates work authorization status at the
request of the SSN holder, individuals in the file may now be U.S.
citizens or otherwise legal workers who simply have not updated their
status with SSA. Our ongoing work in this area suggests that a number
of these records are indeed associated with people who later obtained
permission to work from DHS. SSA policy is to update work authorization
status when the SSN holder informs the agency of the status change and
provides supporting documentation.[Footnote 11] Unless the individual
informs SSA directly of the status change, SSA's enumeration records
will continue to show the person as unauthorized to work and will
record his or her earnings to the Nonwork Alien File. Currently, the
extent to which such noncitizens are included in the file is unknown,
but SSA and DHS officials have both acknowledged that the file may
include a number of people who are currently authorized to work.
DHS officials said that the file would be of greater value if it
contained DHS's identifying numbers--referred to as alien registration
numbers. According to DHS officials, because persons in the file do not
have an identifier in common use by both agencies, they cannot
automatically be matched with DHS records. As a result, DHS officials
told us that they use names and birth dates to match the records, which
can result in mismatches because names can change and numbers in birth
dates may be transposed. SSA officials have said that generally they do
not collect alien registration numbers from noncitizens. Collecting the
alien registration number and providing it in the Nonwork Alien File is
possible, they stated, but would require modifications to SSA's
information systems and procedures. They also noted that SSA would only
be able to collect the alien registration number when noncitizens are
assigned an SSN or when such an individual updates his or her record.
As part of its procedures, SSA is required to verify the immigration
status of noncitizens before assigning them an SSN, which requires
using alien registration numbers.[Footnote 12] However, some
noncitizens, such as those who have temporary visas, (e.g. students)
may not have an alien registration number. In these cases, SSA would
not be able to include the number in the Nonwork Alien File.
The time it takes SSA to validate earnings reports and convey the
Nonwork Alien File to DHS also makes the file less effective for
worksite enforcement. When SSA finishes its various processes to ensure
that the file includes the appropriate data, the reported earnings can
be up to 2 years old. By that time, many of the noncitizens included in
the file may have changed employers, relocated, or changed their
immigration status, resulting in out-of-date data on individuals or
ineffective leads for DHS agents.[Footnote 13]
A DHS official told us that if the Nonwork Alien File were to contain
industry codes for the reporting employers, DHS could target those in
industries considered critical for homeland security purposes, which
would be consistent with DHS's mission and enforcement priorities.
Having information about the industries the employers are in would help
them better link the data to areas of high enforcement priority, such
as airports, power plants, and military bases.
Earnings Suspense File:
Another SSA earnings file, referred to as the Earnings Suspense File,
contains earnings reports in which the name and SSN do not match SSA's
records, suggesting employer or worker error or, potentially, identity
theft and unauthorized work. We have reported that this file, which
contained 246 million records as of November 2004, appears to include
an increasing number of records associated with unauthorized work.
SSA's Office of the Inspector General has used the ESF to identify
employers who have a history of providing names and SSNs that do not
match.
When SSA encounters earnings reports with names and SSNs that do not
match, it makes various attempts to correct them using over twenty
automated processes. However, about 4 percent of all earnings reports
still remain unmatched and are electronically placed in the ESF, where
SSA uses additional automated and manual processes to continue to
identify valid records. Forty-three percent of employers associated
with earnings reports in the ESF are from only 5 of the 83 broad
industry categories, with eating and drinking establishments and
construction being the top categories. A small portion of employers
also account for a disproportionate number of ESF reports. For example,
only about 8,900 employers--0.2 percent of all employers with reports
recorded in the ESF for tax years 1985-2000--submitted over 30 percent
of the reports we analyzed.[Footnote 14]
Our past work has documented that individuals who worked prior to
obtaining work authorization are a growing source of the unmatched
earnings reports in the ESF that are later reinstated to a worker's
account. Once workers obtain a valid SSN, they can provide SSA evidence
of prior earnings reports representing unauthorized employment prior to
receiving their SSN. Such earnings reports can then be used to
determine a worker's eligibility for benefits.[Footnote 15]
DHS officials believe that the ESF could be useful for targeting its
limited worksite enforcement resources. For example, they could use the
ESF to identify employers who provide large numbers of invalid SSNs or
names and SSNs that do not match. They told us that these employers may
knowingly hire unauthorized workers with no SSN or fraudulent SSNs and
that employers who are knowingly reporting incorrect information about
their workers might also be involved in illegal activities involving
unauthorized workers.
However, it is not clear that the ESF, which is much larger than the
Nonwork Alien File, would be manageable or allow for targeted
enforcement. The ESF contains hundreds of millions of records, many
unrelated to unauthorized work, making it difficult to use for
targeting limited resources. While the ESF may help identify some of
the most egregious employers of unauthorized workers, in terms of poor
earnings reporting, its focus is not on unauthorized workers. Our work
has shown that most of the reinstatements from the file belong to U.S.-
born citizens, not to unauthorized workers.[Footnote 16] In addition,
because the ESF contains privileged taxpayer data, SSA cannot share
this information with DHS without specific legislative
authorization.[Footnote 17] SSA's Office of the Inspector General has
recommended that SSA seek legislative authority to share this data with
DHS, but SSA responded that it is beyond the agency's purview to
advance legislation to amend the Internal Revenue Code in order to
allow DHS access to tax return information.[Footnote 18] IRS officials
have also expressed concern that sharing this data could decrease tax
collections and compliance.[Footnote 19] We are examining the
usefulness of SSA data to DHS for these subcommittees, and will
consider ESF issues as part of this work.
Closer Coordination by SSA, IRS, and DHS Could Improve Usefulness of
SSA Earnings Data:
Improving the usefulness of the data could help ensure that limited
enforcement resources are targeted effectively. SSA data could help
identify areas of unauthorized work, but closer collaboration among
SSA, IRS, and DHS can help to ensure that the most useful data are
available in a form that can be used efficiently for enforcement.
Under the current data-sharing arrangement, DHS officials believe the
agency would have to invest significant resources to determine whether
employers it targets are really hiring persons who are not work
authorized. DHS has stated that determining which nonwork SSN holders
are now authorized to work may not be cost-effective and would pull
resources from other national security-related initiatives.[Footnote
20] Neither SSA nor DHS is able to easily and quickly update work
status because they lack a common identifier for their records.
Updating status without a common identifier may not be practical
because different spellings or name variations confound large-scale
matching efforts. For example, an August 2005 report from the SSA's
Office of the Inspector General highlights a substantial proportion of
cases in which names were inconsistent between SSA and DHS.[Footnote
21] In at least six reports in recent years, SSA's Office of the
Inspector General has recommended or mentioned prior recommendations
that SSA work with DHS to update information about work
authorization.[Footnote 22] SSA officials maintain that it is their
policy to make changes to the Social Security record only if the SSN
holder initiates the changes and provides evidentiary documents from
DHS. SSA further states that a "resolution of the discrepant
information between DHS and SSA would require more than a simple
verification."[Footnote 23]
Despite the many problems with the data, there are steps that could be
taken to improve them. For example, the employers who submit the most
earnings reports for nonwork SSNs might be good candidates for outreach
and education about verifying work eligibility. SSA's Office of the
Inspector General officials suggested that DHS send letters to
employers of persons with nonwork SSNs. These letters could encourage
persons listed as having nonwork SSNs, who are now authorized to work,
to update their records. The ESF also has the potential to provide
useful information to DHS, but this information has protected tax
status. Although some of the same difficulties that pertain to the
Nonwork Alien File could also affect the usefulness of the ESF to DHS
enforcement efforts, if these challenges could be overcome, authorizing
transmittal of at least some of the ESF information to DHS might be
warranted.
Producing accurate, useful data will require substantial continued
effort on the part of SSA, DHS, and the IRS: these efforts will be of
little value, however, if the data are not used for enforcement and to
stimulate changes in employer and employee behavior. We have reported
previously that the IRS program of employer penalties is weak, because
of limited requirements on employers to verify and report accurate
worker names and SSNs; we have recommended that IRS consider
strengthening employer requirements, a course that could over time
improve the accuracy of wage data reported to SSA.[Footnote 24] We have
also reported that, consistent with DHS's primary mission in the post-
September 11 environment, DHS enforcement resources have focused mainly
on critical infrastructure industries in preference to general worksite
enforcement.[Footnote 25] In such circumstances, coordination to
leverage usable and useful SSA data is essential to ensure that limited
DHS worksite enforcement resources are targeted effectively. Concluding
Observations:
The federal government likely can make use of information it already
has to better support enforcement of immigration, work authorization
and tax laws. The Earnings Suspense and the Nonwork Alien files have
potential, but even the best information will not make a difference if
the relevant federal agencies do not have credible enforcement
programs. In fact, sharing earnings data to identify potential
unauthorized workers could unnecessarily disclose sensitive taxpayer
information if the data are not utilized by enforcement programs. To
address unauthorized work more meaningfully, IRS, DHS and SSA need to
work together to improve employer reporting, develop more usable and
useful data sets for suspicious earnings reports, and better target
limited enforcement resources. We look forward to contributing to this
endeavor as we continue to conduct our work on using SSA data to help
reduce unauthorized work.
This concludes my prepared statement. I will be happy to answer any
questions you may have.
Contacts and Acknowledgments:
For questions regarding this testimony, please call Barbara Bovbjerg at
(202) 512-7215. Other key contributors to this statement were Blake
Ainsworth, Assistant Director; Lara Laufer, Analyst-in-Charge; Beverly
Crawford; Susan Bernstein; Michael Brostek; Rebecca Gambler; Jason
Holsclaw; Daniel Schwimer; Richard Stana; Vanessa Taylor; Walter Vance;
and Paul Wright.
(130559):
FOOTNOTES
[1] GAO, Social Security: Better Coordination among Federal Agencies
Could Reduce Unidentified Earnings Reports, GAO-05-154 (Washington,
D.C.: February 2005); GAO, Immigration Enforcement: Weaknesses Hinder
Employment Verification and Worksite Enforcement Efforts, GAO-05-813
(Washington, D.C.: August 2005); and GAO, Tax Administration: IRS Needs
to Consider Options for Revising Regulations to Increase the Accuracy
of Social Security Numbers on Wage Statements, GAO-04-712 (Washington,
D.C: August 2004)
[2] SSA receives tax records of employee earnings from employers via
the IRS's Form W-2 (Wage and Tax Statement).
[3] GAO-05-154
[4] Cards issued prior to 1982 do not contain this notation.
[5] The Basic Pilot program was authorized in 1996 through the Illegal
Immigration Reform and Immigrant Responsibility Act (IIRIRA), which
required that the Attorney General, (now DHS) develop and test three
pilot programs to assist employers in verifying workers' identity and
work eligibility. The Basic Pilot program was developed and made
available to employers in six states starting in 1997. In 2003,
Congress required DHS to expand the verification service to all 50
states by December 2004, and DHS met that requirement. To improve its
effectiveness and increase participation, DHS converted the program to
a Web-based system in July 2004.
[6] The DHS data are maintained by the U.S. Citizenship and Immigration
Service, (USCIS).
[7] This indicates the number of businesses that have signed
memorandums of understanding with DHS and is not indicative of the
number of active participants.
[8] GAO-05-813.
[9] IIRIRA, Section 414.
[10] In prior years, DHS officials cited an inability to access the
file, because SSA sent the data to them via a computer mainframe
cartridge that was incompatible with DHS's systems. SSA now supplies
the file in a format that is accessible to DHS agents.
[11] Individuals are not required to update such changes with SSA,
although since 2002 the agency has encouraged them to do so. SSA will
remove the nonwork notation from the SSN and reissue a card to
individuals who were originally assigned a nonwork SSN if the
individual provides SSA documentation of a change in the individual's
work status by DHS.
[12] To do this, SSA field office staff use the alien registration
number, in part, to query DHS's records, through DHS's Systematic Alien
Verification for Entitlements (SAVE) program, which provides certain
DHS data online regarding aliens with such numbers. In addition, SSA
field office staff is instructed to ask noncitizens to present their
immigration and identity documents, which contain their alien
registration numbers for verification.
[13] Under the current process, SSA receives wage information from
employers annually. Once the earnings reports are received, SSA will
ensure the validity of the reported information before sending it to
DHS. As a result, DHS receives the data 1 to 2 years after the earnings
occur. For example, SSA officials told us that they SSA received
earnings from employers based on tax year 2004 in early 2005. After
receipt, SSA electronically validated such information throughout the
summer and fall of that year, and sent all reported earnings associated
with a nonwork SSN to DHS in January 2006.
[14] GAO-05-154.
[15] GAO-05-154.
[16] GAO-05-154.
[17] Internal Revenue Code Section 6103 provides that tax returns and
return information are confidential and may not be disclosed by IRS and
others having access to the information, with certain specific
exceptions. Because the confidentiality of tax data is considered
crucial to voluntary compliance, if agencies want to establish new
efforts to use taxpayer information, executive branch policy calls for
a business case to support sharing tax data.
[18] Social Security Administration, Office of the Inspector General,
Social Security Number Misuse in the Service, Restaurant, and
Agriculture Industries, A-O8-05-25023 (Baltimore, Maryland: April
2005); and Obstacles to Reducing Social Security Number Misuse in the
Agriculture Industry, A-08-99-41004 (Baltimore, Maryland: January
2001).
[19] GAO-05-154.
[20] GAO-05-154.
[21] Social Security Administration, Office of the Inspector General,
Reported Earnings Prior to the Issuance of a Social Security Number, A-
03-04-14037 (Baltimore, Maryland: August 2005).
[22] Social Security Administration, Office of the Inspector General,
Social Security Administration Benefits Related to Unauthorized Work, A-
03-03-23053 (Baltimore, Maryland: March 2003); Profile of the Social
Security Administration's Non-Work Alien File, A-14-03-23071
(Baltimore, Maryland: September 2003); Reported Earnings Prior to the
Issuance of a Social Security Number, A-03-04-14037 (Baltimore,
Maryland: August 2005); Unauthorized Work Social Security Numbers at
the Department of Defense, A-03-05-25127 (Baltimore, Maryland:
September 2005); Impact of Nonimmigrants Who Continue Working after
Their Immigration Status Expires, A-08-05-15073 (Baltimore, Maryland:
September 2005); and Work Activity for Social Security Numbers Assigned
for Nonwork Purposes in the State of Utah, A-14-01-11048 (Baltimore,
Maryland: March 2002).
[23] SSA, OIG, A-03-04-14037; A-03-05-25127.
[24] GAO-04-712.
[25] GAO-05-813 and GAO, Immigration Enforcement: Challenges to
Implementing the INS Interior Enforcement Strategy, GAO-02-861T.
(Washington, D.C.: June 19, 2002)
