[Federal Register Volume 71, Number 190 (Monday, October 2, 2006)]
[Notices]
[Pages 58043-58044]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-16096]


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SOCIAL SECURITY ADMINISTRATION


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

AGENCY: Social Security Administration (SSA).

ACTION: Notice.

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SUMMARY: 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.

FOR FURTHER INFORMATION CONTACT: 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 [email protected].

SUPPLEMENTARY INFORMATION: 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

[[Page 58044]]

Direct 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 (http://www.socialsecurity.gov/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)

    Dated: September 15, 2006.
Dale W. Sopper,
Deputy Commissioner, for Budget, Finance and Management.
 [FR Doc. E6-16096 Filed 9-29-06; 8:45 am]
BILLING CODE 4191-02-P