IRS Response to GAO Inquiry of June
11, 1986

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Mr. Joseph Delfico

the Department of Health and Human Services. Individuals are entitled to seek review of adverse decisions, irrespective of the amount in controversy, by a civil action commenced within sixty days of the mailing of the notice of decision. 42 USC 405(g). Where Congress has enacted a specific waiver of sovereign immunity, the limitations and conditions upon which the United States consents to be sued must be strictly construed, and exceptions thereto may not be implied. Lehman Nakshian 453 US 156, 161 (1981); Soriano v. United States, 352 US 270, 276 (1957); United States v. Sherwood, 312 US 584, 590-591 (1941).

V.

Accordingly, we are of the opinion that neither the Treasury Department nor IRS would be liable in an action by a worker to recover additional benefit amounts due as a result of uncredited earnings which could have been corrected through the reconciliation process. In this regard, the Federal Tort Claims Act, 28 USC 2671 et seq., specifically excludes claims based on the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the government. 28 USC 2680(a). Since the IRS is not obligated to attempt a complete reconciliation of missing and discrepant wage reports, the Federal Tort Claims Act provides no basis for suit based upon the failure to correct uncredited earnings through the reconciliation process.

Appendix V

Potential Effect of Uncredited 1980 or 1981 or
Both Wages on Social Security
Monthly Benefits

aSSA calculated monthly Social Security benefits, as of January 1984, with and without 1980 or 1981 or both wages that had previously not been credited. GAO calculated the difference in monthly benefits for each employee.

bSubtotal does not add to figure shown due to rounding.

Note: The average payment impact on monthly benefits for the affected employees was $17.00.

Appendix VI

Potential Effect of Uncredited 1979 Self

Employment Earnings on Social Security
Monthly Benefits

aSSA calculated monthly Social Security benefits, as of January 1984, with and without 1979 self-
employment earnings that had previously not been credited. GAO calculated the difference in monthly
benefits for each self-employed person.

"Of the original 7,100 self-employed, whom we identified with uncredited earnings, we excluded from
our study 124 self-employed who had subsequently had their earnings credited to their accounts and 88
self-employed who did not have sufficient Social Security coverage for benefits.

Note: The average payment impact on the monthly benefits for the affected self-employed was $7.30.

U.S. G.P.O. 1987- 181-235:60099