Ambiguity in Food Stamp Manual regarding whether owner of LLC must report all business income as personal income.

Topic: Public Assistance, Decided by Judge Baxter 
Docket Number: ***** , Decision Date: 2014-04-16 
Attachment: Click here to download the decision. 

The Office of Inspector General (OIS) sought to administratively disqualify Respondent, a food stamp recipient, for committing two intentional program violations and to recoup an overissuance of $33,693.00 for the period of January 2009 through December 2012.  The first allegation is that Respondent committed an intentional program violation by failing to report her LLC’s gross income as her personal income when applying or recertifying for benefits. The Food Stamp Manual does not unambiguously require the owner of an LLC to report gross income as personal income, because it does not fall within either of the two categories—corporations versus sole proprietorships—for which clear reporting rules are specified.  However, Respondent did commit an intentional program violation by failing to report when her monthly income exceeded $3,000.00 during the three months of the year in which she earned her entire year’s income.  She is, thus, ineligible for food stamps for twelve months and must repay benefits for those three months.