Income Discrepancy Resolution

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The Exceeds Threshold Report contained in the EIV system identifies families that may have substantially under reported wages, social security benefits and/or unemployment compensation. If UIV data is greater than tenant-reported income by $2,400 or greater annually, PHAs are expected to resolve these income discrepancies. In accordance with 24 CFR 5.236, PHAs are required to obtain written third party verification of disputed UIV data. Below is a summary of steps a PHA should take to resolve income discrepancies:

1. Discuss the discrepancy with the tenant.
2. Request current documents from the tenant. i.e. Original, current and consecutive pay stubs, original SSA benefit verification letter, etc.
3. Request written third party verification of any income source that the tenant disputes.
4. Confirm effective dates of unreported income source.
5. In cases where the PHA confirms that the tenant failed to report income source(s), PHA should determine retroactive rent due to the PHA and execute a repayment agreement with the tenant.
6. In cases where the PHA obtains additional income information via the EIV system (and verifies the UIV data with the tenant and/or 3rd party source) that would result in a more accurate income determination and the PHA policy allows for increases in rent (in between annual re-examinations), the PHA should adjust the rent accordingly to reduce the occurrence of improper subsidy payments.

Below is a list of resources a PHA may use to assist in the income discrepancy resolution process.

Social Security Administration (SSA) Form 7004: This SSA form may be used by a PHA to request a tenant’s Social Security Earnings Statement. The statement provides a record of the tenant’s Social Security earnings history, year-by-year and provides an estimate of benefit payments that the tenant and the tenant’s family may qualify for now or in the future.
See http://www.ssa.gov/mystatement for more information.

Internal Revenue Service (IRS) Form 4506-T: This IRS form may be used by a PHA to request a tenant’s tax return transcript. The transcript shows most line items contained on the return as it was originally filed, including any accompanying forms and schedules. Tax return transcripts are generally available for the current and past three years. If a statement of the tenant's tax account, which shows changes that the tenant or IRS made after the original return was filed, you must request a “Tax Account Transcript.” This transcript shows basic data including marital status, type of return filed, adjusted gross income, taxable income, payments and adjustments made on the tenant’s account. There is no charge for the transcripts and should be received within 10 business days from the time the IRS receives the request. See http://www.irs.gov/faqs/faq1-6.html for more information.

Internal Revenue Service (IRS) Form 4506: This IRS form may be used by a PHA to request a tenant’s exact copy of a previously filed and processed return and all attachments (including Forms W-2). Copies are generally available for returns filed in the current and past 6 years. There is a $39 fee for each tax year requested. See http://www.irs.gov/faqs/faq1-6.html for more information.