Employers must obtain employee social security numbers for the purposes of the Internal Revenue Service (IRS). However, is this the only time an employer is to request this number and who needs to be contacted if it is discovered there has been an error regarding an employee’s number? Three of the agencies involved with social security numbers are the IRS, Social Security Administration (SSA) and also, on some occasions, the Immigration and Naturalization Service (INS). These agencies are beginning to crack down on incorrect matches with these numbers and it is important to understand an employer’s responsibility when an error is discovered.

Upon beginning employment, an employee must fill out a W-4 form for the IRS for tax withholding purposes. A social security number is required for this form. The IRS plans to begin penalizing employers for not verifying these numbers. Beginning in June of 2004, a fine of $50 per incorrect form will be assessed for incorrect forms from the year 2002. Since an employer is required to supply the IRS with correct information, in the event an error is discovered, the employer needs to fill out a W-2C form to correct the error.

Another form that an employee fills out in the beginning of employment is the I-9. This is the form that the INS requires to be filled out to verify eligibility of employment. However, a social security number is only used for this form if the employee chooses to use his/her card as verification of employment eligibility. If a social security card is used and a mismatch is found, the INS becomes involved. An indication of an incorrect match does not automatically require that the INS be notified, though. The organization needs to give the employee an opportunity to supply new documentation.

In the event that new documentation is supplied, the employer should then verify this new number with the SSA at 1-800-772-6270. If the number is valid and correct, the IRS should be contacted and the employer is not at risk with the INS. However, if it is found the number is not correct, the employer is then in the position of possibly knowingly hiring an illegal alien.

How is an employer notified of an incorrect match? Mismatch letters come from the SSA. It is reported that in 2000, the SSA incorrectly issued 100,000 social security numbers to non-citizens. Due to this, the SSA plans on sending out 750,000 mismatch letters to employers. Mismatches can be due to a name change, marital status change, stolen identity or clerical error on either your part or the SSA’s part. Despite the reason for the error, an employer is required to report the change to the IRS and possibly the INS.

What should you do as an employer receiving a letter? In a recent article in HRMagazine, released by Society for Human Resource Management (SHRM), SHRM advises your first step in receiving a letter should be to review any documentation you have filled out. Depending on the information found during this review, termination may be required. Keep in mind, fines can be incurred for mistakes made on past employee’s I-9 forms. Documentation must be kept on past employees for three years, so it important to check even past forms. Because the IRS is also involved, employers must also look into the W-2 forms and correct any errors found there. Finally, document all steps taken throughout the process to show your effort in complying with the SSA. An employee’s future income depends on accurate information being given to these agencies. Therefore, an employer needs to explain this to the employee and work with the employee to correct the issue.