Citation Nr: 24017828 Decision Date: 04/25/24 Archive Date: 04/25/24 DOCKET NO. 18-45 877A DATE: April 25, 2024 ORDER The change in the Veteran's means test eligibility category from copay exempt to copay required in the VA healthcare system for income year 2015 was proper, and the claim is denied. FINDINGS OF FACT 1. The matter was adjudicated and denied by the Board of Veterans' Appeals (Board) in an August 2021 decision. 2. The Veteran appealed the August 2021 decision to the United States Court of Appeals for Veterans Claims (Court) which issued a Joint Motion for Remand in October 2022. 3. The Court's October 2022 remand directives cannot be complied with by the Board as a matter of law. 4. The Veteran's attributable household income for the year 2015 exceeded the VA National Means Test threshold of $31,987 for a veteran with no dependents. CONCLUSION OF LAW The criteria for treatment without copay in the VA healthcare system for income year 2015 have not been met. 38 U.S.C. §§ 1710, 1722; 38 C.F.R. §§ 3.271, 3.272, 17.36, 17.47. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from September 1959 to February 1962. This matter was remanded by the Board in April 2019 and September 2020 for additional development. Following the completion of Board remand directives by the agency of original jurisdiction (AOJ), the Board issued an August 2021 decision denying the Veteran's appeal regarding the change in his means test eligibility category from copay exempt to copay required in the VA healthcare system for income year 2015. Subsequently, the Veteran appealed the Board's August 2021 decision to the Court. In October 2022, the Court vacated the Board's decision and remanded the matter back to the Board finding that the Board had failed to provide a copy of the evidence that it had considered. Therefore, the Court was unable to access the full record nor understand the basis for the August 2021 denial. On remand, the Board was instructed to ensure that a copy of evidence connected to the appeal was uploaded into the Veterans Benefits Management System (VBMS) electronic claims folder so that the Court may be able to review the file in case of a future appeal. The Court's Remand Initially, the Board recognizes the Court's authority in its review of Board decisions. However, the Board is unable to comply with the Court's October 2022 directives as a matter of law, as the evidence in the appeal contains Federal Tax Information (FTI). FTI is safeguarded by the Internal Revenue Service (IRS) pursuant to the regulations found under Internal Revenue Code (IRC) § 6103 or 26 U.S.C. § 6103. FTI is any federal tax return or return information received from the IRS or a secondary source such as Social Security Administration (SSA), Federal Office of Child Support Enforcement (OCSE), Bureau of the Fiscal Service (BFS), or Centers for Medicare and Medicaid Services (CMS). Return information is defined very broadly and includes, but is not limited to: o Information that IRS obtained from any source or developed through any means that relates to the potential liability of any person under the IRC for any tax, penalty, interest, fine, forfeiture or other imposition or offense; o Information extracted from a return, including names of dependents or the location of business; o The taxpayer's name, address, and identification number, o Information collected by the IRS about any person's tax affairs, even if identifiers, such as name, address and identification number are deleted; o Status of whether a return was filed, under examination or subject to other investigation or processing, including collection activities; and o Information contained on transcripts of account. See 26 U.S.C. § 6103(b)(2)(A). Agencies or agents that legally receive FTI from the IRS or from secondary sources have generally entered into formal agreements subject to safeguard regulations pursuant to 26 U.S.C. § 6103. See 26 U.S.C. § 6103(b)(5)(B)(iii). The IRS is the sole determinator of eligible agencies or agents who may review FTI. Id. The IRS has permitted VA to legally receive FTI after satisfactorily finding that VA has adequate safeguard programs in place to protect the confidentiality of return information and prevent unauthorized use of that information. Id. Approved safeguard programs prevent storage or uploading of FTI directly into the VBMS electronic claims folder as FTI must be stored in a secured FTI File Repository (FFR), and the VBMS electronic claims folder is not considered a secure FFR for FTI purposes. See VBA Manual M2101, XIV.4.B.2.c. Additionally, Board employees who require access to FTI to perform their official duties are considered to have a "need to know," and only these individuals may access FTI for adjudication of a pertinent claim. See I.R.S. Pub. 1075, Tax Information Security Guidelines for Federal, State and Local Agencies, https://www.irs.gov/pub/irs-pdf/p1075.pdf. If a Board employee with a need to know, or any other Federal employee, willfully and unlawfully discloses tax information, the employee may be fined, imprisoned, or both. 26 U.S.C. 7213(a)(1). The employee may also be terminated from employment upon conviction for an unlawful disclosure. Id. Finally, 26 U.S.C. 7431(a)(1) permits a taxpayer to bring a civil suit for damages against the United States if any Federal employee knowingly or negligently discloses any tax return information in violation of IRC § 6103. Based on the above, the Board respectfully cannot comply with the Court's remand directives. Importantly, at no point in time could the Board upload FTI into the VBMS electronic claims folder. IRC regulations have always and continue to prevent such action. Additionally, only the IRS has the authority to determine which external agency is considered an exception to the disclosure provisions found under IRC § 6103 and allow review of FTI. It is not incumbent on the Board to allow anyone to view the file outside of VA as the agreement allowing Board employees with a need to know to review FTI is based on the parameters of an agreement between VA and IRS. Plainly stated, IRC § 6103 prohibits VA from releasing tax return information to any individual other than approved Board individuals. If a Board employee follows the Court's remand directives, the employee may be fined, imprisoned, or both; the employee may also be terminated from employment upon conviction for unlawful disclosure; and the United States government would be vulnerable to the possibility of civil suits filed against it by an aggrieved taxpayer. Therefore, the Board could not and will not upload the Veteran's FTI to the VBMS electronic claims folder. Co-Pay Status The Veteran seeks a copay exempt status in the VA healthcare system for income year 2015 based on his means test eligibility category. Income Verification Match (IVM) is a secure procedure by which VA may obtain income information from the SSA and the IRS, in order to verify income amounts that are reported to VA. The adjudication of this matter involves information provided by SSA and the IRS for 2015. However, to avoid disclosure of sensitive information, the Board's decision does not directly cite dollar amounts included in any IVM report that has not been verified by the Veteran. Therefore, the text of this decision is not subject to the additional protections required under the IVM procedures. VA shall furnish hospital care and medical services to any veteran who is unable to defray the expenses of necessary care. 38 U.S.C. §§ 1710(a)(2)(G). For the purposes of 38 U.S.C. § 1710(a)(2)(G), a veteran shall be considered to be unable to defray the expenses of necessary care if his attributable income is not greater than a specified income threshold, which is updated annually. 38 U.S.C. § 1722(a)-(c). If a veteran does not qualify under 38 U.S.C. § 1710(a)(2)(G), he will be responsible for a copayment for VA healthcare services that relate to nonservice-connected disabilities. The Means Test income threshold is updated annually and published in the Federal Register. See 38 C.F.R. § 3.29. For the year 2015, the National Means Test threshold was $31,978 for a veteran with no dependents. Determinations with respect to attributable income shall be made in the same manner, including the same sources of income and exclusions from income, as determinations with respect to income that are made for assessing eligibility for pension under 38 C.F.R. §§ 3.271 and 3.272. Payments from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under 38 C.F.R. § 3.272. See 38 C.F.R. § 3.271. The term "attributable income" means income for the calendar year preceding application for care, determined in the same manner in which an income determination is made for pension purposes under 38 U.S.C. § 1521. See 38 U.S.C. § 1722(f)(1), (3); 38 C.F.R. § 17.47(d)(4). The Veteran is enrolled in the VA healthcare system. The IVM report shows that the Veteran's income for 2015 was approximately $5,000 greater than the National Means Test for a veteran with no dependents. The Veteran submitted tax forms that were consistent with IVM reports demonstrating income of $39,000, approximately, for income year 2015. Included in the Veteran's tax submission are the first two pages of his 2015 tax return. Again, the information found on the first two pages are consistent with the above listed income. The tax return also indicates that the Veteran had experienced $7,313 in rental real estate losses. Gross income from a business, farm, or profession, reduced by operating expenses, is included in the computation of income for VA purposes. See 38 C.F.R. § 3.271 (c)(1). A loss sustained in operating a business, profession, farm, or investments may not be deducted from income from any other source for VA purposes. See 38 C.F.R. § 3.271(c)(3). Therefore, the Veteran's real estate rental losses are $0 for the purposes of calculating income for the National Means Test. Medical expenses in excess of five percent of the applicable maximum annual pension rate (MAPR) can be excluded from countable income. 38 C.F.R. § 3.272(g). The MAPR in 2015 for a veteran with one dependent was $12,868. Therefore, the five percent deductible was $643. The Veteran submitted a SSA tax form showing $1,253 in Medicare premiums and receipts for $352 in prescription expenses for income year 2015. In total, the reported medical expenses were $1,065. When the $643 deduction is applied, the Veteran had $962 in medical expenses that can be deducted. Additionally, the SSA tax form also demonstrated that the Veteran had repaid $1,053, which can also be deducted from the Veteran's total income. Cumulatively, the deductions amount to $2,015. After the allowable deductions have been calculation, the Veteran's income for 2015 was approximately $37,000. In October 2018, the Veteran submitted a statement noting that his income for 2015 was approximately $27,500, the Board finds that the evidence confirms that his income, for VA purposes, was approximately $37,000. See 38 C.F.R. §§ 3.271, 3.272. The Veteran's claim that the change in his means test eligibility category from copay exempt to copay required in the VA healthcare system for income year 2015 was improper, is not warranted. In reaching this decision the Board considered the doctrine of reasonable doubt, however, as the evidence persuasively weighs against the Veteran's claim, the doctrine is not for application. Lynch v. McDonough, 21 F.4th 776 (Fed. Cir. 2021). The appeal is denied. H.M. WALKER Veterans Law Judge Board of Veterans' Appeals Attorney for the Board J. Lee The Board's decision in this case is binding only with respect to the instant matter decided. This decision is not precedential and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.