S Corp Tax At Issue

Congress is currently considering a bill that would extend tax cuts first enacted during the George W. Bush administration. One aspect of this bill that has attracted little public attention would affect Social Security. Currently "S" corporations do not pay the F.I.C.A. tax, the one that funds the Social Security trust funds. "S" corporations pay no federal income tax; their income passes through to their owners who pay individual income tax. The owners do not pay F.I.C.A. taxes on the income they receive from an "S" corporation. The "S" corporation technique is used primarily by professionals such as physicians, dentists, lawyers, architects, etc. The bill would change that for "S" corporations with three or fewer key service providers. There is a fight against the "S" corporation provisions of the bill, which is being labeled as a tax increase. If passed, the bill would increase tax revenues by about $11 billion over ten years.

Tax increase or loophole closing? What do you think?

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Updated Fee Payment Numbers

Social Security has released updated numbers on payments to attorneys and others eligible for direct payment of fees for representing Social Security disability claimants.

Fee Payments
Month/Year	Volume	Amount
Jan-10	32,227	$111,440,046.23
Feb-10	29,914	$105,708,101.59
Mar-10	34,983	$122,874,426.87
Apr-10	44,740	$153,478,589.32
May-10	34,686	$119,527,194.40

Notice the dramatic changes from month to month. Representing Social Security claimants is a roller coaster. The bills and employee salaries that an attorney who represents Social Security claimants must pay each month are not on the roller coaster with Social Security fee payments. They stay pretty much the same each month. Every year I find that I make most of my profit for the year in just two or three months out of the year. This may be one of the reasons that so few employees of the Social Security Administration leave the agency to begin representing Social Security claimants.

Obama Social Security Number Nonsense

As I reported earlier, the "birthers" who claim that Barack Obama was born in Kenya making him ineligible to be President, are trying a new tack, claiming that the President's Social Security number must be a fake since it is a number that was being assigned at the time to people living in Connecticut even though Barack Obama was living in Hawaii at the time he took his first job. They managed to get questions asked about this asked at a White House press briefing.

The Associated Content blog gives a possible explanation of the Social Security number, that Barack Obama was living not in Hawaii but in Indonesia at the time the Social Security number was assigned and that Obama obtained it by mail, using the return address of his father, who was divorced from his mother and living in Connecticut at the time. I think a simpler and more likely explanation is that Obama obtained his Social Security number while visiting his father in Connecticut. It would have been easier to have obtained that Social Security number by walking into an office while back in the U.S. on a visit rather than obtaining it while oveseas. Others who read this blog might have more knowledge of the process of issuing Social Security numbers to American citizens who were residing overseas back in that era. I suppose it is done now when a birth is registered with a U.S. embassy oveseas but there would have been a different process back in the 1970s.

Hearing Office Average Processing Time Report

From the newsletter of the National Organization of Social Security Claimants Representatives (NOSSCR) -- click on each page twice to see it full size.

Two Federal Register Items

Today's Federal Register includes two items from the Social Security Administration. The sunset dates for the Listings for Cardiovascular System, Endocrine System, Growth Impairment, Hematological Disorders, Musculoskeletal System, Mental Disorders and Neurological, and Respiratory System have been extended to July 2, 2012. We do know that proposed new Listings for mental disorders may be coming in the near future, however. Social Security has also decided to change from using the word "Wholly" to using the word "Fully" when describing decisions that are completely favorable to claimants. I have no idea why they are going to the trouble to do this. The only explanation is that this "will make our regulations clearer and more consistent." Must be somebody's pet peeve.

Major Online Problem At Social Security?

I have received an unconfirmed report that there has been a major problem with a online form used by Social Security disability claimants to record their medical sources, the i3368. Social Security needs this medical source information to know where to write for medical records. Data entered on the i3368 between February 24 and May 31 of this year may not have propagated into Social Security's other data systems. Data may have been lost, perhaps permanently, a very scary prospect. Claimants may have been denied based upon a mistaken belief that they had not received recent medical treatment.

It was unclear from the report I received whether this was only some of the i3368s during this time period or all of them. It was also unclear to me whether this was only a problem for data entered online by claimants or their representatives or whether the problem extended to data entered by Social Security employees. If the report I have heard is true, I imagine that Social Security is still trying to figure out just how bad this is.

I would appreciate any information about this problem. If the report I have heard is true, Social Security needs to issue a press release today, even if the full dimensions of the problem are still not clear.

New Rule For On-Site CE Reviews

From a final rule posted in the Federal Register today by the Social Security Administration:

We are revising the threshold billing amount that triggers annual on-site reviews of medical providers who conduct consultative examinations (CEs) for our disability programs under titles II and XVI of the Social Security Act (Act). The revision will raise the threshold amount to reflect the increase in billing amounts since we first established the threshold amount in 1991. We expect the revised threshold amount will reestablish the level of oversight activity we required under our original rules.

Deficit Commission Taking Aim At Social Security

From the Washington Post:

One of the oddest Web posts making the rounds in Washington is a series of blurry videos from Capitol Hill showing people coming and going from a closed-door meeting of President Obama's new deficit commission.

The mundane scenes have a sinister cast for activists who say the commission is at work on a secret plan to gut Social Security. Nancy Altman, whose group, Social Security Works, shot the footage, says the threat to the nation's primary social safety net is greater now than at any time in the program's 75-year history. ...

[S]everal groups, including MoveOn.org and the Campaign for America's Future, are threatening to make Social Security an issue in the midterm elections.

"It's likely to be a pretty full court press," said MoveOn campaign director Daniel Mintz, whose group plans to ask candidates to sign a pledge opposing Social Security cuts. "We're going to demand solutions to the deficit that make corporations and the rich pay their fair share of taxes, rather than cutting benefits and squeezing the middle class." ...

Five years ago, when then-President George W. Bush proposed carving out a portion of Social Security taxes to create private retirement accounts, a coalition of progressive groups and advocates for the elderly organized to smother the plan. Even in a Republican Congress, the idea went nowhere. In 2006, Democrats campaigned against the plan and regained control of Congress.

Now some of the same groups are watching Obama's commission closely. They note that many of its members have publicly advocated cutting Social Security, including co-chairman Alan Simpson, a former GOP senator from Wyoming, who has chastised "greedy geezers" for fighting to protect their retirement checks while their grandchildren face a towering debt.

"Social Security is not the problem. It's simply becoming the target," said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.