What Kind of Attorney Do We Need?

In My Humble Opinion
1

Ivylad got Social Security in 2016 due to disability. The SSA reported that we received $50,000, which is about ten times more what we got.

We ended up owing Uncle Sam about $11K and not filing our taxes until Jan 31 of this year. We’ve been disputing with SSA since April 14, 2016. (They’re supposed to give you an answer in 60 days, but when we called in July they were all “Huh? We ain’t got nothin’” and we had to resubmit the paperwork. Yes, we have proof of when we initially filed the dispute, or Request for Reconsideration, as it’s called.)

Our CPA told us to file but not pay, and when the IRS asks for their money, call them and tell them what’s going on. We can’t get a straight answer out of SSA. All they say is it’s in processing. The CPA has suggested we contact our US representative, who helped other clients resolve their issue quickly.

We have a sneaking suspicion, but no proof, that the money went to the SSA attorney who represented Ivylad and for whatever reason the funds have not been disbursed. All we know is the SSA reported to the IRS that they paid Ivylad X, when we never saw that money at all.

Do we need a tax attorney or another SSA attorney?

2

Correction: Dispute filed with SSA in April of 2017. That shouldn’t change things.

3

Try your Congressperson’s office first. They have staffers whose entire job is to cut through government red tape and they can get results that ordinary people can’t.

4

We plan to, but I wanted a back up just in case. My CPA says the US Rep’s office cleared up in three months what their client had been fighting for three years.

5

I’d say tax attorney.

6

Have you contacted the IRS?

It is my personal experience that contact and acknowledging that there is a dispute and taxes may be owed to the IRS is better than waiting until your case rises to the top of the pile. Or you could wait as your CPA says. But then you may be seen as trying to avoid a possible debt and get your bank accounts locked, etc. All the IRS really wants is to know that you are not running or hiding from taxes. The IRS may have resources to get to the bottom of your problem before it becomes their problem.

But by all means follow the advice of your CPA. See what they say about contacting the IRS before this blows up.

7

The CPA told us to file, which we did. They said don’t pay, and when the IRS writes us a letter then we can fill them in on what’s going on.

8

First question - is ivylad your spouse or kid?

No legal advice here, but there is no way the entire funds went to the atty. SS disab atty fees are (generally) capped at 25% of back bens or $6k - whichever is less. So 75% would have gone to your spouse (or any rep payee), with 25% withheld for potential atty fees.

Feel free to feel critical of SS - they may well have messed up your case. They do mess up a relatively small percentage of the 10s of millions of claims they handle and payments they make every month. And their notices are not a model of clarity. BUT - IME of doing SS disab for 30+ years, in the overwhelming majority of cases (damned near 100%), they EVENTUALLY get it right. Likely slim reassurance for the uncertainty as a claim/dispute pends.

Are you saying you owe $11k in taxes on $50k back benefits? That really seems odd to me. I really no nothing about tax liability on SS disability benefits. In my ignorance, I had assumed they were not subject to fed taxes. Also, $50k is a MONSTROUSLY HUGE amount of back benefits. Is there any possibility that you might have misunderstood some aspect of the notices?

If spouse got a $50k payment, absent some reason I can’t imagine, he should have gotten a check for $44k, w/ $6k withheld for fees. If that is not what happened, either the notice/decision is incorrect, or you are misreading it.

Point of clarification - IMO you wouldn’t be hiring an “SSA attorney”, as an SSA attorney" would be an employee of SSA. I would consider your rep a “disability attorney” or somesuch." May seem minor, but may avoid confusion.

I’m curious, what does your disability atty say about all of this? If you fear he/she did something untoward, why isn’t your ire directed at them at least as much as at SSA? Attys who represent disability claimants ought to be experts at the very type of question you have. (Of course, some are worthless bottomfeeders IMO/E.) If your spouse was successful, they likely did SOMETHING right - and have already been well compensated, and should be happy to answer your questions as within the scope of their representation. If they aren’t why not contact the bar association? Of have your congresscritter look into THEM?

By all means, have your congresscritter send in a form letter to SSA. That gets a certain flag attached to your claim. It likely has SOME MILD effect in SLIGHTLY reducing the time periods, but to tell the truth, as a general matter I don’t even pay attention whether there is a Congressional inquiry attached to a file or not.

I’d imagine your tax advisor would be the best person to advise you as to how to handle this apparent dispute on your pending tax filing. I’m not sure what else an attorney might do. Possibly, a tax atty might know how best to deal w/ the IRS concerning any potential discrepancy. As for the rest of it, simply persist, be polite, keep all documents, and eventually you should get an explanation from either the atty who represented your spouse or SSA.

9

Ivylad is my husband.

It’s all very confusing. We got the tax form from the SSA with a notice of different amounts paid to us, with no note as to what they could possibly be, since we never received them.

Thanks for clarifying about the disability attorney. To that point, Ivylad has called him several times but he won’t return the calls.

I don’t doubt SSA deals with millions of claims. But when we have paperwork STAMPED BY THEM with a date and a signature, then they lose it, and we have to start all over, and we get no apology and meanwhile the specter of the IRS is looming, it gets very frustrating.

All I know is years after receiving refunds, for 2016 we were told we owed $11K, and the CPA says this is because of what the SSA said they paid us.

I’ll let you know how it goes.

10

Get a new Disability Attorney to assist you with the local SSDI office. They should also be able to help you manage the old attorney, if necessary. If the SSA did send you $50,000 it should have come to you. I was asked for my account number for routing purposes. In either case, get the attorney to help you sort all of this out. Rely on the CPA for the IRS info, and the attorney for the SSDI piece.

11

Yeah, you are frustrated. And confused. I get that. If you have the paperwork, you aren’t having to “start all over”, you just have to get the correct info correctly entered in your file. It’ll likely take time, but eventually it will be assigned to the correct employee, who understands what happened and what needs to be done, and will promptly take the necessary steps. When you meet that employee, if you talk to them, you’ll likely get an apology as well. But otherwise, expecting an apology from the huge bureaucracy impresses me as a fruitless expectation.

Also, don’t know if this is your case, but many many people conduct their lives in extremely unconventional and complicated manners. When that happens, it shouldn’t be a great shock that the system is not set up to process their cases smoothly.

As a whole, I’ve been pretty impressed with the competence an politeness of SSA staff top to bottom. Of course, I suspect that the pleasanter the person on the other end of the phone, the more likely the staff will respond in kind. Again have no idea that you have been anything other than sweetness and light in your contacts.

Good luck. Just be patient, persistent, and polite.

12

Nice idea, but unlikely to be successful IMO, as there is no money to be had for the new atty. Even if you agreed to pay them hourly, I’d expect them to be hesitant to “go after” another lawyer. They might be willing to translate the notices and explain what is happening, but SSA is available to do that for free.

IMO the best approach is to set up an appt w/ your local office, take the names of everyone you speak with, get copies of every paper, have EVERY code on EVERY paper explained to you, and follow it up the chain. That’s what the SSA folk are there to do - what YOU are paying them for. Take advantage of them.

I’m sure there is some procedure for contesting apparent tax liability, but I know nothing about such things. Your tax guy or a tax lawyer could advise you.

I have seen many instances in which incorrect notices have been issues. I’ve seen far more instances in which people misunderstood what the notices inartfully attempted to communicate. But in every instance, the best approach was to persist up the chain. There really aren’t any effective shortcuts.

All, JMO.

13

IRS came knocking, saying they want their money plus penalties and interest by March 19.

Ivylad called, talked to a lovely lady with our same last name and the same birthday as Ivylad, who said she’d put our case on hold for 45 days, which works out to around April 15. She said SSA has taken too long and to contact our Congressman/Senator.

Fortunately, our rep has a local office, so we filled out a privacy release and went down with all our paperwork, because we were’t sure what they would need. The nice young man said they’ve dealt with a lot of these types of cases, they have a good working relationship with the congressional liaison at the local SSA office (layers upon layers of bureaucracy) and that we should hear something in about two weeks.

Stay tuned…

14

I don’t do disability law, but this troubles the hell out of me. In my experience, an attorney who doesn’t return calls is troublesome.

Dinsdale, since you know a lot about this stuff. How do these funds usually get disbursed? Is the attorney’s fees portion made payable to the attorney, and the rest to the recipient, or is it all paid to the attorney, who then has to disburse to the client?

15

I’m interested to hear what Dinsdale says. The rep for the CongressCritter said the funds would have come directly to us, with the attorney getting his cut separately. So somehow somewhere an I didn’t get dotted but a T was crossed, so we’re getting taxed on money we never received.

16

I took a day off work and Ivylad and I went to the local SSA office and waited for three hours before we got to talk to someone.

Bottom line (and this makes no sense, so maybe someone can explain it) the back benefits Ivylad was awarded were already paid in the form of Workers Comp. Oh, and we have to pay taxes on it.

I guess one cannot collect overlapping sums of SS and WC? His WC attorney is stumped, the tax attorney his WC attorney talked to seemed :confused::confused: about it.

The way the SSA clerk explained it was Ivylad wouldn’t have gotten the WC money he received as it would have come from SSA if he had gotten the favorable ruling four years ago. Since WC is not taxable but SS is, we have to pay taxes on four years of “back benefits.”

I’m going to cut a check to the IRS to get them off our back, but I don’t understand how someone can be awarded back benefits, but SSA says “Oh, you already got them in the form of WC. And by the way, the IRS wants the taxes on them.”

17

This page seems to cover a similar scenario.

$11k seems like a lot though, but I guess maybe over four years…

18

Sorry - hadn’t seen this in a while.

Yeah, there can be a set-off between SSA DIB and WC. That’s pretty basic for anyone practicing SS disability or WC law. I don’t know the specifics b/c I don’t need to to do my job. Nor do I know about tax liabilities for various benefits. Again, I don’t need to. Sorry. If I were a WC or tax atty representing/advising folk who also sought SS DIB bens, I sure hope I would understand it.

Most commonly - a claimant receiving bens is given 75% of their back bens. 25% is withheld to be paid to the rep. If atty fees come to <25%, the remainder is paid to the claimant. There are relatively infrequent instances where all funds are paid to the claimant, and the rep has to go after them to get paid.

19

We didn’t seek SS. WC forced my husband to apply for it, because it would lessen what they have to pay, which makes sense.

20

Apologies if my word choice offended you. Whether it was your idea or someone else’s, you applied. Any competent atty handling the subject area ought to have been able to explain the potential implications to you. As might any competent SS employee - had you asked.

Sorry you had to wait 3 hours. Had you called and made an appointment?