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H.R. 15571 (94th): A bill to amend chapter 21 of the Internal Revenue Code of 1954 and title II of the Social Security Act to provide that the payment of social security taxes by a nonprofit organization with respect to its employees shall constitute (for both tax and benefit purposes) a constructive filing by such organization of the certificate otherwise required to provide social security coverage for such employees if it has not received a refund or credit of such taxes, and to require the filing of such a certificate by any nonprofit organization which paid such taxes but received a refund or credit because it had not previously filed such certificate.

The text of the bill below is as of Oct 19, 1976 (Passed Congress).


PUBLIC LAW 94-563—OCT. 19, 1976                                     90 STAT. 2655

Public Law 94-563
94th Congress
                                   An Act
To amend chapter 21 of the Internal Revenue Code of 1954 and title II of the            Oct. 19, 19i6
  Social Security Act to provide that the payment of social security taxes by a         [H.R. 15571]
  nonprofit organization with respect to its employees shall constitute (for both
  tax and benefit purposes) a constructive filing by such organization of the
  certificate otherwise required to provide social security coverage for such
  employees if it has not received a refund or credit of such taxes, and to require
  the filing of such a certificate by any nonprofit organization which paid such
  taxes but received a refund or credit because it had not previously filed such
  certificate.

  Be it enacted hy the Senate and House of Representatives of the
United States of America in Congress assembled, That (a) section 210                  Social security
(a) (8) (B) of the Social Security Act is amended—                                    taxes.
         (1) by inserting after "filed pursuant to section 3121 (k) of the             42 USC 410.
     Internal Revenue Code of 1954" in the matter preceding clause (i)
     the following: " (or deemed to have been so filed under paragrapn
     (4) or (5) of such section 3121 ( k ^ ";
         (2) by inserting after "filed" in clauses (i), (ii), and (iii) the
     following: "(or deemed to have been filed)"; and
         (3) by striking out "is in effect" in the matter following clause
     (iii) and inserting in lieu thereof "is (or is deemed to be) in
     effect".
   (b) Section 3121(b)(8) of the Internal Revenue Code of 1954                         26 USC 3121.
(relating to exclusion of certain services from definition of employ-
ment) is amended—
         (1) by inserting after "filed pursuant to subsection (k) (or the
     corresponding subsection of prior law)" in the matter preceding
     clause (i) the following: "or deemed to have been so filed under
     paragraph (4) or (5) of such subsection";
         (2) by inserting after "filed" in clauses (i), (ii), and (iii) the
     following:" (or deemed to have been filed)"; and
         (3) by striking out "is in effect" in the matter following clause
      (iii) and inserting in lieu thereof "is (or is deemed to be) in
     effect".
   (c) Section 3121 (k) of such Code (relating to exemption of
religious, charitable, and certain other organizations) is amended by
adding at the end thereof the following new paragraphs:
        "(4)    CONSTRUCTIVE FILING OF CERTIFICATE WHERE NO REFUND
     OR CREDIT O F TAXES HAS BEEN MADE.—
               "(A) In any case where—
                   "(i) an organization described in section 501(c) ( 3 | 26 USC 501.
                 which is exempt from income tax under section 601(a)
                 has not filed a valid waiver certificate under paragraph
                 (1) of this subsection (or under the corresponding pro-
                 vision of prior law) as of the date of the enactment of
                 this paragraph or any subsequent date, but
                   "(ii) the taxes imposed by sections 3101 and 3111 26 USC 3101,
                 have been paid with respect to the remuneration paid 3111-
                 by such organization to its employees, as though such a
                 certificate had been filed, during any period (subject to
                 subparagraph ( B ) ( i ) ) of not less than three consecutive
                 calendar quarters,

90 STAT. 2656 PUBLIC LAW 94-563—OCT. 19, 1976 such organization shall be deemed (except as provided in subparagraph (B) of this paragraph) for purposes of sub- Section (b) (8) (B) and section 210(a) (8) (B) of the Social 42 use 410. Security Act, to have filed a valid waiver certificate under paragraph (1) of this subsection (or under the corresponding provision of prior law) on the first day of the period described in clause (ii) of this subparagraph effective on the first day of the calendar quarter in which such period began, and to have accompanied such certificate with a list contain- ing the signature, address, and social security number (if any) of each employee with respect to whom the taxes described in such subparagraph were paid (and each such employee shall be deemed for such purposes to have con- curred in the filing of the certificate). "(B) Subparagraph (A) shall not apply with respect to any organization if— "(i) the period referred to in clause (ii) of such sub- paragraph (in the case of that organization) terminated before tlie end of the earliest calendar quarter falling wholly or partly within the time limitation (as defined 42 use 405. in section 205(c)(1)(B) of the Social Security Act) immediately preceding the date of the enactment of this paragraph, or "(ii) a refund or credit of any part of the taxes which were paid as described in clause (ii) of such subpara- graph with respect to remuneration for services per- formed on or after the first day of the earliest calendar quarter falling wholly or partly within the time limitation (as defined in section 205(c)(1)(B) of the Social Security Act) immediately preceding the date of enactment of this paragraph (other than a refund or credit which would have been allowed if a valid waiver certificate filed under paragraph (1) had been in effect) has been obtained by the organization or its employees prior to September 9,1976. "(5) CONSTRUCTIVE FILING OF CERTIFICATE WHERE REFUND OR CREDIT HAS BEEN MADE AND NEW CERTIFICATE IS NOT FILED.—IN ANY case where— 26 use 501. "(A) an organization described in section 501(c) (3) which is exempt from income tax under section 501(a) would be deemed under paragraph (4) of this subsection to have filed a valid waiver certificate under paragraph (1) if it were not excluded from such paragraph (4) (pursuant to subpara- graph (B) (ii) thereof) because a refund or credit of all or a part of the taxes described in paragraph (4) (A) (ii) was obtained prior to September 9,1976; and "(B) such organization has not, prior to the expiration of 180 days after the date of the enactment of this paragraph, filed a valid waiver certificate under paragraph (1) which is effective for a period beginning on or before the first day of the first calendar quarter with respect to which such reiund or credit was made (or, if later, with the first day of the earliest calendar quarter for which such certificate may be in effect under paragraph (1) (B) (iii)) and which is accom- panied by the list described in paragraph (1) (A),
PUBLIC LAW 94-563—OCT. 19, 1976 90 STAT. 2657 such organization shall be deemed, for purposes of subsection (b) (8)(B) and section 210(a)(8)(B) of the Social Security Act, 42USC410. to have filed a valid waiver certificate under paragraph (1) of this subsection on the 181st day after the date of the enactment of this paragraph, effective for the period beginning on the first day of the first calendar quarter with respect to which the refund or credit referred to in subparagraph (A) of this paragraph was made (or, if later, with the first day of the earliest calendar quarter falling wholly or partly within the time limitation (as defined in section 205(c)(1)(B) of the Social Security Act) 42 USC 405. immediately preceding the date of the enactment of this para- graph) j and to have accompanied such certificate with a list containing the signature, address, and social security number (if any) of each employee described in subparagraph (A) of para- graph (4) including any employee with respect to whom taxes were refunded or credited as described in subparagraph (A) of this paragraph (and each such employee shall be deemed for such purposes to have concurred in the filing of the certificate). A certificate which is deemed to have been filed by an organization on such 181st day shall supersede any certificate which may have been actually filed by such organization prior to that day except to the extent prescribed by the Secretary or his delegate. "(6) APPLICATION or CERTAIN PROVISIONS TO CASES or CONSTRUC- TIVE FILING.—All of the provisions of this subsection (other than subparagraphs (B), ( F ) , a n d (H) of paragraph (1)), including the provisions requiring payment of taxes under sections 3101 and 26 USC 3101. 3111 with respect to the services involved, shall apply with respect 26 USC 3111. to any certificate which is deemed to have been filed by an organi- zation on any day under paragraph (4) or (5), in the same way they would apply if the certificate had been actually filed on that day under paragraph (1); except that— "(A) the provisions relating to the filing of supplemental lists of concurring employees in the third sentence of para- graph (1) (A), and in paragraph (1) (C), shall apply to the extent prescribed by the Secretary or his delegate; "(B) the provisions of paragraph (1) (E) shall not apply unless the taxes described in paragraph (4) (A) (ii) were paid by the organization as though a separate certificate had been filed with respect to one or both of the groups to which isuch provisions relate; and "(C) the action of the organization in obtaining the refund or credit described in paragraph (5) (A) shall not be con- sidered a termination of such organization's coverage period for purposes of paragraph (3). Any organization which is deemed to have filed a waiver certificate under paragraph (4) or (5) shall be considered for purposes of section 3102(b) 26 USC 3102. to have been required to deduct the taxes imposed by section 3101 with respect to the services involved. "(7) B O T H EMPLOYEE AND EMPLOYER TAXES PAYABLE B Y ORGANI- ZATION FOR RETROACTIVE PERIOD IN CASES OF CONSTRUCTIVE FILING.— Notwithstanding any other provision of this chapter, in any case where an organization described in paragraph (5) (A) has not filed a valid waiver certificate under paragraph (1) prior to the expiration of 180 days after the date of the enactment of this paragraph and is accordingly deemed under paragraph (5) to have filed such a certificate on the 181st day after such date, the taxes due under section 3101, with respect to services constituting
90 STAT. 2658 PUBLIC LAW 94-563—OCT. 19, 1976 employment by reason of such certificate for any period prior to the first day of the calendar quarter in which such 181st day 26 u s e 3111. occurs (along with the taxes due under section 3111 with respect to such services and the amount of any interest paid in connection with the refund or credit described in paragraph (5) (A)) shall be paid by such organization from its own funds and without any deduction from the wages of the individuals who performed such services; and those individuals shall have no liability for the payment of such taxes. "(8) EXTENDED PERIOD FOR PAYMENT OF TAXES FOR RETROACITVE COVERAGE.—Notwithstanding any other provision of this title, in any case where an organization described in paragraph (5) (A) files a valid waiver certificate under paragraph (1) by the end of the 180-day period following the date of the enactment of this paragraph as described in paragraph (5) (B), or (not having filed such a certificate within that period) is deemed under paragraph (5) to have filed such a certificate on the 181st day following that 26 u s e 3101. date, the taxes due under sections 3101 and 3111 with respect to services constituting employment by reason of such certificate for any period prior to the first day of the calendar quarter in which the date of such filing or constructive filing occurs may be paid in installments over an appropriate period of time, as determined under regulations prescribed by the Secretary or his delegate, rather than in a lump sum.", 26 u s e 3121 (d) The amendments made by this section shall apply with respect note. to services performed after 1950, to the extent covered by waiver cer- tificates filed or deemed to have been filed under section 3121 (k) (4) Ante, p. 2655. or (5) of the Internal Revenue Code of 1954 (as added by such amend- ments). 26 u s e 3121 SEC. 2. Notwithstanding any other provision of law, no refund or note. credit of any tax paid under section 3101 or 3111 of the Internal Reve- nue Code of 1954 by an organization described in section 501(c) (3) of such Code which is exempt from income tax under section 501(a) of such Code shall be made on or after September 9, 1976, by reason of such organization's failure to file a waiver certificate under flection 3121 ( k ) ( l ) of such Code (or the corresponding provision of prior law), if such organization is deemed to have filed such a certificate under section 3121 (k) (4) of such Code (as added by the first section of this Act). Remuneration. SEC. 3. In any case where— 26 u s e 3121 (1) an individual performed service, as an employee of an orga- note. nization which is deemed under section 3121 (k) (5) of the Inter- nal Revenue Code of 1954 to have filed a waiver certificate under section 3121 (k) (1) of such Code, at any time prior to the period for which such certificate is effective; (2) the taxes imposed by sections 3101 and 3111 of such Code were paid with respect to remuneration paid for such service, but such service (or any part thereof) does not constitute employ- ment (as defined in section 210(a) of the Social Security Act and section 3121(b) of such Code) because the applicable taxes so paid were refunded or credited (otherwise than through a refund or credit which would have been allowed if a valid waiver certifi- cnte filed under section 3121 ( k H l ) of such Code had been in effect) prior to September 9, 1976; and
PUBLIC LAW 94-563—OCT. 19, 1976 90 STAT. 2659 (3) any portion of such service (with respect to which taxes were paid and refunded or credited as described in paragraph (2)) would constitute employment (as so defined) if the organi- zation had actually filed under section 3121 (k) (1) of such Code a 26 USC 3121. valid waiver certificate effective as provided in section 3121 (k) (5) (B) thereof (with such individual's signature appear- Ante, p. 2655. ing on the accompanying list), the remuneration paid for the portion of such service described in paragraph (3) shall, upon the request of such individual (filed in such manner and form, and with such official, as may be prescribed by reg- ulations made under title I I of the Social Security Act) accompanied 42 USC 401. by full repayment of the taxes which were paid under section 3101 of such Code with respect to such remuneration and so refunded or cred- 26 USC 3101. ited, be deemed to constitute remuneration for employment as so defined. In any case where remuneration paid by an organization to fin individual is deemed under the preceding sentence to constitute remuneration for employment, such organization shall be liable (not- withstanding any other provision of such Code) for repayment of any taxes which it paid under section 3111 of such Code with respect to 26 USC 3111. such remuneration and which were refunded or credited to it. Approved October 19, 1976. LEGISLATIVE HISTORY: HOUSE REPORT No. 94-1711 (Comm. on Ways and Means). CONGRESSIONAL RECORD, Vol. 122 (1976): Sept. 30, considered and passed House. Oct. 1, considered and passed Senate.