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  1. #1
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    Default Does USC Title 26 Affect the Social Security Administration

    I know that SSA has title 42 of the United States Code, but do they have to abide by the rules set forth in title 26 also? Specifically how "Gross Income" is defined? The two titles seem to have a different set of rules for defining income, but it seems like the rules for SSA in title 42 are just not as detailed (possbily cause they don't need to be?)

    Sorry if this is a stupid question. I'm new to this.

  2. #2
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    Default Re: How Much Does Usc Title 26 Affect the Social Security Administration

    No clue to the question posed. Probably need a government attorney to answer that question. Why don't you ask the question you are really trying to find the answer to with the details?

  3. #3
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    Default Re: How Much Does Usc Title 26 Affect the Social Security Administration

    Okay.

    Some background: My 3 yr old is disabled, and receiving SSI payments with my wife as the rep. payee. In July of 2009, we began doing adult foster care, paid by the state of Oregon. I had heard from a fellow foster care provider that when reporting my income to SSA, we didn't have to report the foster care payments. I wanted to do everything legit, so I turned in the first pay stub, and clearly marked "Foster Care Income" on it, but the next letter we got said that they are counting it as self-employment income. Now, apparently the way they handle self-employment income is they estimate an annual lump sum from the income, divide it by 12, and apply the same amount to each month throughout the year. The effect this had on us, is that it was applied retroactively to every month for the year 2009. Then we get a letter stating that we had income they didn't know about for the first 6 months of the year, and they overpaid us by over $3k, and they want it back blah blah blah. Any they're going to lower my son's SSI payments. I'm currently gathering the info needed to fill out the 1400 page appeal form.

    Okay so I've been researching this. In defining what "income" is, Title 26 of the United States Code section 131 states:
    "General rule Gross income shall not include amounts received by a foster care provider"
    hence my earlier question. I want to know if this being United States code, does it apply only to tax purposes? Or should it apply to "gross income" no matter who you're reporting it to (or not reporting). See, we have a contract with the state, to provide certain services to meet the health and safety needs of our foster client. The client is even allowed to put in the contract trips that she wants to take, activities she wants to do. It's my understanding that the payment is for covering all expenses needed to fulfill this contract. The IRS doesn't consider you to be "in business" until you are providing foster care more than 5 individuals over 18. Why should it be any different for SSA?

    I've kind of gotten the run around on this one. maybe it's a grey area?
    I was told by a worker at the local soc. sec. office that she didn't think they counted foster care income.
    I was told when calling the 800# for soc. sec. that it is their policy to count foster care income, when i asked for something on paper to prove this, like a publication or policy, he told me that there was no publication or anything on paper that he could give me "it's just our policy".
    I've spoken to one lawyer that said they don't count it, and two that said they do.
    I spoke to another person at the 800# that he and his supervisor couldn't figure out why my caseworker was counting the foster care income, for about 20 min i was on hold while they researched, only to tell me that since their rule states that they don't count foster care payments for a foster "child", and I'm doing "adult" foster care, this is why the income is counted.

  4. #4
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    Default Re: How Much Does Usc Title 26 Affect the Social Security Administration

    It is a gray area and there is no one regulation that applies. If you are going to quote rules, you should use POMS when dealing with your local office because that is what they use.

    Here is a link to what constitutes a trade or business in POMS

    https://secure.ssa.gov/apps10/poms.n...1!opendocument SSA is supposed to use the same rules as the IRS. You stated that the IRS doesn't consider you self-employed unless you have 5 or more residents. Do you have that in writing?

    Here is a link to how SSI counts foster care income if you are not self-employed.

    https://secure.ssa.gov/apps10/poms.n...0!opendocument
    The source and the funding for the foster care funds should be documented. If you look at D.5, the provider is supposed to show how much money they expend on behalf of the foster care recipient and that it is possible that the provider does make money from this. You need to figure out exactly what you spend the money on.

    Gather documents that support your position. You can't have too many documents. You are either self-employed or you are spending the foster care funds on the adults in your home. If you are not self-employed, figure out the costs of your home and the things you provide and you could make the arguement that they are contributing to these expenses. Five people eating dinner, 1/5 of the expense belongs to the adult foster recipient. And so on. An SSI claims rep would understand that logic. If you are self-employed, you have valid self-employment expenses that can be subtracted from the gross income. Talk to your tax preparer.

    File a request for reconsideration (SSA-561) on the facts of the overpayment and the reduction in your son's SSI check. Ask for an informal conference. You are either going to state that your self-employment income is not as high as estimated or that you are not self-employed.

    If an overpayment is still assessed for 2009, you have an excellent case for waiver of the overpayment (SSA-632) since you did not know you were going to become self-employed.

    If these requests are denied after you have provided documents, file a request for hearing. Keep copies of everything. You will need to keep good records from now on.

  5. #5
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    Default Re: How Much Does Usc Title 26 Affect the Social Security Administration

    [QUOTE=Janke;387104]Here is a link to how SSI counts foster care income if you are not self-employed.

    https://secure.ssa.gov/apps10/poms.n...0!opendocument
    QUOTE]

    Thanks for this. I didn't know about the POMS before.
    D. 5. is titled "Foster Care Payments to Providers of Foster Care"

    two bullets down says "Assume that the payment made to the provider is a foster care payment (i.e., is to meet the needs of the individual in care) and is not income to the provider, unless there is evidence to the contrary."

    that says it all, doesn't it?

  6. #6
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    Default Re: How Much Does Usc Title 26 Affect the Social Security Administration

    Quote Quoting Janke
    View Post
    https://secure.ssa.gov/apps10/poms.n...1!opendocument SSA is supposed to use the same rules as the IRS. You stated that the IRS doesn't consider you self-employed unless you have 5 or more residents. Do you have that in writing?
    IRS Publication 525 titled "Taxable and Nontaxable Income" (http://www.irs.gov/pub/irs-pdf/p525.pdf) states:
    "Payments you receive from a state, political subdivision, or a qualified foster care placement agency for providing care to qualified foster individuals in your home generally are not included in your income. However, you must include in your income payments received for the care of more than 5 individuals age 19 or older and certain difficulty-of-care payments.

    and

    "If you receive payments that you must include in your income, you are in business as a foster care provider and you are self-employed"

    It seems to me that it is safe to conclude that since I only have one foster individual, that I am not considered self-employed to the IRS?

  7. #7
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    Default Re: Does USC Title 26 Affect the Social Security Administration

    You have a good arguement with regulations to back you up. File an appeal.

  8. #8
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    Default Re: Does USC Title 26 Affect the Social Security Administration

    Quote Quoting Janke
    View Post
    You have a good arguement with regulations to back you up. File an appeal.
    Thanks Janke, I will. Thanks for your help and the great info.

  9. #9
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    Feb 2010
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    Default Re: Does USC Title 26 Affect the Social Security Administration

    nuwuforever:

    I am in the exact same situation ... but at the v-e-r-y beginning of my journey. Please let me know how things go and the outcome.

    I may need to pick your brain from your experience ... if you have a-n-y information you could forward ... I'd appreciate it!

    Thanks ... CingBears@aol.com

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