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Registration Requirements for Representatives to Receive Direct Payment of Fees Approved for Services Provided Before the Social Security Administration or a Federal Court and Forms 1099-MISC

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Social Security Administration (SSA).




We are issuing this notice to advise attorneys and non-attorneys who represent claimants before SSA, and attorneys who represent Social Security or Supplemental Security Income claimants before the Federal courts, that the requirements a representative must meet for SSA to pay the approved fee, or a part of the approved fee, directly to the representative from a claimant's past-due benefits will change effective January 1, 2007. Currently, SSA pays all or part of the fee we approve to the claimant's representative from his or her past-due benefits if the representative is an attorney or a non-attorney participant in SSA's direct fee payment demonstration project. SSA also pays all or part of the fee a Federal court approves directly to an attorney from a claimant's past-due benefits. SSA must expand the information a representative is required to submit to SSA in order for SSA to pay a fee directly because sections 6041(a) and 6045(f) of the Internal Revenue Code (IRC), as implemented by 26 CFR 1.6041-1, require SSA to issue a Form 1099-MISC to each representative who receives, by direct payment from SSA, aggregate fees of $600 or more in a calendar year. To meet this requirement, a person whom a claimant appoints to represent him or her before SSA after December 31, 2006, who is otherwise eligible for direct fee payment, and an attorney for whom a Federal court approves a fee on or after January 1, 2007, must provide SSA with his or her Social Security Number (SSN) as a prerequisite for SSA to pay a fee directly to the representative.

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Everett Jackson, Social Security Administration, Office of Budget, Finance and Management, 2-K-5 East Low Rise, 6401 Security Boulevard, Baltimore, MD 21235-6401, (410) 965-0014, e-mail

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Pursuant to sections 206 and 1631(d)(2) of the Social Security Act (Act), SSA:

  • Determines the maximum fee an attorney or non-attorney representative may charge and collect for services the representative provided before SSA in a claim under title II or title XVI of the Act; and
  • Pays the fee, or part of the fee, that was approved by the Commissioner of Social Security (Commissioner) or by a Federal court, under title II or title XVI, directly to an attorney out of a portion of the claimant's past-due benefits.

42 U.S.C. 406 and 42 U.S.C. 1383(d)(2). Additionally, section 303 of the Social Security Protection Act of 2004 (SSPA), Public Law 108-203, directs the Commissioner to carry out a 5-year nationwide demonstration project that extends the fee withholding and direct payment procedures that apply to attorneys under titles II and XVI of the Act to non-attorney representatives who meet certain prerequisites. This demonstration project commenced on February 28, 2005. Therefore, SSA is now paying directly to attorneys and non-attorney participants in the direct payment demonstration project fees we approve for administrative services, and to attorneys fees Federal courts approve for services before the courts.

The Debt Collection Improvement Act of 1996 (DCIA), Public Law 104-134, mandates that each federal agency require persons “doing business with that agency” to provide the agency with his or her taxpayer identification number (TIN). 31 U.S.C. 7701. Under the DCIA, a person is considered to be doing business with an agency if the person is assessed a fee by the agency. Because SSA is required by sections 206(d) and 1631(d)(2)(C) of the Act to assess a fee on attorneys and eligible non-attorneys each time that SSA directly pays representational fees to them, SSA is doing business with representatives whom we directly pay. The DCIA also requires that, when a federal agency disburses money, it must include the TIN on each certified voucher submitted to a disbursing official. For individuals, the TIN is generally the SSN. 26 U.S.C. 6109. This means that, when SSA certifies for direct payment or directly pays a fee to a representative, SSA must include the representative's SSN on the payment voucher it submits to the Department of the Treasury. Accordingly, to comply with the DCIA's requirement that we obtain an SSN from each representative to whom we directly pay a fee and provide that SSN on each payment voucher to the Department of the Treasury, when a claimant has appointed a representative on January 1, 2007 or later, or when a Federal court has approved a fee on January 1, 2007 or later, SSA requires that the representative provide his or her SSN to SSA before SSA implements a favorable administrative determination or decision or before SSA acts on a Federal court's fee approval, as a condition for SSA to directly pay a fee or a portion of the fee to the representative from a claimant's past-due benefits.

Pursuant to sections 6041(a) and 6045(f) of the IRC, as implemented by 26 CFR 1.6041-1, SSA is required to issue a Form 1099-MISC to each representative who receives, by direct payment from SSA, aggregate fees of $600 or more in a calendar year. Per section 6109 of the IRC, each representative must provide SSA with his or her TIN. Generally, the Internal Revenue Service (IRS) Form W-9 is used to obtain the TIN. However, as allowed by the IRS, SSA is developing a substitute form, Form SSA-1699, Request for Appointed Representative's Start Printed Page 58044Direct Payment Information, to obtain the representative's SSN and other information we need to issue Forms 1099-MISC. We published a Federal Register notice of our intent to establish both the SSA-1699 and the SSA-1695, which is discussed below. See 71 FR 38681-38683, July 7, 2006.

The one-time submission of the SSA-1699 is the first step in a two-step registration process that a representative must complete in order to receive direct fee payment in a specific claim. We are providing an electronic means by which representatives may complete and submit the SSA-1699 via our Internet Web site. The second step requires that a representative provide SSA with his or her SSN in each instance of representation (i.e., each time the representative is appointed to represent a claimant before SSA or, if an attorney did not register when the claim was pending before the Commissioner, each time a Federal court approves a fee) by submitting the Form SSA-1695, Identifying Information for Possible Direct Payment of Authorized Fees. The first step in the registration process, the one-time submission of the SSA-1699, begins with publication of this notice. The second step, submission of the SSA-1695, will begin in November of 2006. We will provide further information about the required forms, and the application developed to enable completion and submission of the SSA-1699 electronically via the Internet, on the Representing Claimants Web site on Social Security Online (​representation).

If a representative does not provide SSA with his or her SSN by completing both steps in the registration process as described above, SSA will not make direct fee payment to the representative, even if the representative is an attorney or a participant in the non-attorney direct payment demonstration project.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; and 96.006, Supplemental Security Income)

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Dated: September 15, 2006.

Dale W. Sopper,

Deputy Commissioner, for Budget, Finance and Management.

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[FR Doc. E6-16096 Filed 9-29-06; 8:45 am]