Rev. Rul. 55-473

SECTION I. PURPOSE.

The purpose of this Revenue Ruling is to furnish an explanation of and procedures to be followed in applying the provisions of section 403(a) and (b) of the Social Security Amendments of 1954, approved September 1, 1954, and the provisions of section 3121(k) of the Internal Revenue Code of 1954 (Federal Insurance Contributions Act, chapter 21, subtitle C, of the Internal Revenue Code of 1954), as amended by the Social Security Amendments of 1954, which latter section supersedes section 1426(1) of the Internal Revenue Code of 1939 (chapter 9, subchapter A, of the 1939 Code).

SEC. 2. SCOPE.

The instructions in this Revenue Ruling are interim in nature and are subject to modification by regulations to follow. However, any such modification shall not render invalid any act performed pursuant to, and in accordance with, the provisions of this Revenue Ruling.

SEC. 3. STATUTORY PROVISIONS.

.01 Section 3121(k) of the 1954 Code, as amended by the Social Security Amendments of 1954 provides, in part, as follows:

(k) EXEMPTION OF RELIGIOUS, CHARITABLE, AND CERTAIN OTHER ORGANIZATIONS.-

(1) WAIVER OF EXEMPTION BY ORGANIZATION.-An organization described in section 501(c)(3) which is exempt from income tax under section 501(a) may file a certificate (in such form and manner, and with such official, as may be prescribed by regulations made under this chapter) certifying that it desires to have the insurance system established by title II of the Social Security Act extended to service performed by its employees and that at least two-thirds of its employees concur in the filing of the certificate. Such certificate may be filed only if it is accompanied by a list containing the signature, address, and social security account number (if any) of each employee who concurs in the filing of the certificate. Such list may be amended at any time prior to the expiration of the twenty-fourth month following the first calendar quarter for which the certificate is in effect, by filing with the prescribed official a supplemental list or lists containing the signature, address, and social security account number (if any) of each additional employee who concurs in the filing of the certificate. The list and any supplemental list shall be filed in such form and manner as may be prescribed by regulations made under this chapter. The certificate shall be in effect (for purposes of subsection (b)(8)(B) and for purposes of section 210(a)(8)(B) of the Social Security Act) for the period beginning with the first day following the close of the calendar quarter in which such certificate is filed, except that, in the case of service performed by an individual whose name appears on a supplemental list filed after the first month following the first calendar quarter for which the certificate is in effect, the certificate shall be in effect, for purposes of such subsection (b)(8) and for purposes of section 210(a)(8) of the Social Security Act, only with respect to service performed by such individual after the calendar quarter in which such supplemental list is filed.

.02 Section 403 of the Social Security Amendments of 1954 provides as follows:

Sec. 403. (a) In any case in which-

(1) An individual has been employed, at any time subsequent to 1950 and prior to the enactment of this Act, by an organization which is exempt from income tax under section 101(6) of the Internal Revenue Code of 1939 but which has failed to file prior to the enactment of this Act a waiver certificate under section 1426(1)(1) of the Internal Revenue Code of 1939;

(2) The service performed by such individual as an employee of such organization during the period subsequent to 1950 and prior to 1955 would have constituted employment (as defined in section 210 of the Social Security Act and section 1426(b) of the Internal Revenue Code of 1939) if such organization had filed prior to the performance of such service such a certificate accompanied by a list of the signatures of employees who concurred in the filing of such certificate and such individual's signature had appeared on such list;

(3) The taxes imposed by sections 1400 and 1410 of the Internal Revenue Code of 1939 have been paid with respect to any part of the remuneration paid to such individual by such organization for such service;

(4) Part of such taxes have been paid prior to the enactment of this Act;

(5) So much of such taxes as have been paid prior to the enactment of this Act have been paid by such organization in good faith and upon the assumption that a waiver certificate had been filed by it under section 1426(1)(1) of the Internal Revenue Code of 1939; and

(6) No refund of such taxes has been obtained, the amount of such remuneration with respect to which such taxes have been paid shall, upon the request of such individual (filed in such form and manner, and with such official, as may be prescribed by regulations made under subchapter A of chapter 9 of the Internal Revenue Code of 1939), be deemed to constitute remuneration for employment as defined in section 210 of the Social Security Act and section 1426(b) of the Internal Revenue Code of 1939.

(b) In any case in which-

(1) An individual has been employed, at any time subsequent to 1950 and prior to the enactment of this Act, by an organization which has filed a waiver certificate under section 1426(1)(1) of the Internal Revenue Code of 1939;

(2) The service performed by such individual during the time he was so employed would have constituted employment (as defined in section 210 of the Social Security Act and section 1426(b) of the Internal Revenue Code of 1939) if such individual's signature had appeared on the list of signatures of employees who concurred in the filing of such certificate;

(3) The taxes imposed by sections 1400 and 1410 of the Internal Revenue Code of 1939 have been paid prior to the enactment of this Act with respect to any part of the remuneration paid to such individual by such organization for such service; and

(4) No refund of such taxes has been obtained, the amount of such remuneration with respect to which such taxes have been paid shall, upon the request of such individual (filed on or before January 1, 1957, and in such form and manner, and with such official, as may be prescribed by regulations made under subchapter A of chapter 9 of the Internal Revenue Code of 1939), be deemed to constitute remuneration for employment as defined in section 210 of the Social Security Act and section 1426(b) of the Internal Revenue Code of 1939, and such individual shall be deemed to have concurred in the filing of the waiver certificate filed by such organization under section 1426(1)(1) of the Internal Revenue Code of 1939.

SEC. 4. SUPPLEMENTAL LISTS FILED UNDER SECTION 3121(k) OF THE 1954 CODE, AS AMENDED

.01 In general.-Pursuant to section 3121(k) of the 1954 Code, as amended, a supplemental list on Form SS-15a Supplement, Amendment to List on Form SS-15a, properly filed out and signed, will be accepted as a valid amendment to the list on Form SS-15a, List to Accompany Certificate on Form SS-15 Waiving Exemption From Taxes Under the Federal Insurance Contributions Act, if it is filed before the end of the 24th month following the first calendar quarter for which the certificate on Form SS-15 Certificate Waiving Exemptions From Taxes Under the Federal Insurance Contributions Act, is in effect. Section 3121(k) of the 1954 code, as amended, is effective with respect to services performed on and after January 1, 1955.

.02 Nonapplicability of section 3121(k) of the 1954 code, as amended.-In view of the 24-month period, section 3121(k), as amended, has no application to a supplemental list which purports to amend a list filed with a certificate which is effective for any calendar quarter beginning before July 1, 1952. Also, section 3121(k) of the 1954 Code, as amended, has no application to a supplemental list filed prior to September 1, 1954 (the date of enactment of the Social Security Amendments of 1954).

.03 Supplemental list filed on or after September 1, 1954.-A supplemental list filed on or after September 1, 1954, will constitute a valid amendment provided such supplemental list is filed within the 24-month period prescribed by section 3121(k) of the 1954 Code, as amended. If a supplemental list is filed prior to the end of the first month following the first calendar quarter for which the certificate is in effect, the certificate will be effective, in the case of any individual whose name appears on such supplemental list, with respect to services performed on and after the effective date of the certificate. If the supplemental list is filed after the first month following the first calendar quarter for which the certificate is in effect, the certificate will be effective, in the case of an individual whose name appears on such supplemental list, with respect to services performed after the calendar quarter in which the supplemental list is filed, except that the certificate shall not be effective with respect to services performed by any such individual prior to January 1, 1955.

Example 1. XYZ corporation, an organization exempt from income tax under section 101(6) of the 1939 Code, filed a certificate on Form SS-15 which was effective July 1, 1952. B , an employee of XYZ corporation, did not concur in the original filing of the certificate and the XYZ corporation did not report any of B's remuneration. In September 1954, B signed a Form SS-15a Supplement which was filed in the office of the District Director of Internal Revenue during September 1954. The Form SS-15a Supplement was filed within the 24-month period following the first calendar quarter for which the certificate was in effect. However, even though the Form SS-15a Supplement is valid, all services performed by B prior to January 1, 1955, are excepted from employment for the reason that the certificate is effective in the case of B only as to services performed by him after December 31, 1954.

Example 2 . The same circumstances exist as in Example 1, except that the certificate filed by the XYZ corporation was effective April 1, 1952. The Form SS-15a Supplement filed in September 1954 is invalid since it was not filed before the end of the 24th month following the first calendar quarter for which the certificate was in effect. Likewise, any supplemental list filed in the fourth quarter of 1954 which purports to amend a list filed with a certificate which is effective for any calendar quarter beginning prior to October 1, 1952, will not be filed within the 24-month period prescribed by section 3121(k) of the 1954 Code, as amended and therefore is invalid.

Example 3 . The same circumstances exist as in Example 1, except that the certificate filed by the XYZ corporation became effective July 1, 1954, and the Form SS-15a Supplement was filed in October 1954. Such supplemental list is effective with respect to all services performed by B on and after July 1, 1954, since such supplemental list was filed prior to the end of the first month following the first calendar quarter for which the certificate is in effect. (The provisions of section 3121(k) of the 1954 Code, as amended, are not applicable in this case, the certificate and the supplemental list having been filed pursuant to and in accordance with the provisions of section 1426(l) of the 1939 Code. However, the same result would be reached in any case where the supplemental list is filed prior to the end of the first month following the first calendar quarter for which the certificate is in effect, irrespective of whether the supplemental list is filed pursuant to section 1426(l) of the 1939 Code or section 3121(k) of the 1954 Code as amended.)

.04 Reopening of cases involving prior invalid amendments.-District Directors of Internal Revenue are not required to initiate any action with respect to the reopening of cases involving supplemental lists on Form SS-15a Supplement which were invalid for the reason that they were not filed within the time limit specified in section 1426(l) of the 1939 Code. However, the amendment of section 3121(k) makes it possible for such organizations to submit new supplemental lists provided the 24-month time limitation specified by section 3121(k) of the 1954 Code, as amended, is met.

SEC. 5. REQUESTS OF INDIVIDUALS UNDER SECTION 403(a) OF THE SOCIAL SECURITY AMENDMENTS OF 1954.

.01 In general.-Under certain circumstances an individual, who as an employee performed services after December 31, 1950, and prior to September 1, 1954, for an organization which had failed to file, prior to September 1, 1954, a valid certificate on Form SS-15, may request that the remuneration received by him for services performed after 1950 and before 1955 be deemed to constitute remuneration for employment for purposes of the taxes imposed under the Federal Insurance Contributions Act and for purposes of benefits under title II of the Social Security Act. However, the provisions of section 1426(a) of the 1939 Code are applicable in determining the extent to which such remuneration will constitute wages for purposes of such taxes. In order that the remuneration may be so deemed to be remuneration for employment, it is necessary that all of the following requirements be met:

1 The individual performed some services for the organization subsequent to December 31, 1950, and prior to September 1, 1954;

2 The organization was exempt under section 101(6) of the 1939 Code and failed to file prior to September 1, 1954, a valid certificate under section 1426(1) of the 1939 Code;

3 The individual's services subsequent to December 31, 1950, and prior to January 1, 1955, would have constituted employment, as defined in section 1426(b) of the 1939 Code, if a certificate filed by the organization had been in effect for the period during which the services were performed and the individual's signature had appeared on the accompanying list on Form SS-15a;

4 Employee and employer taxes under the Federal Insurance Contributions Act have been paid with respect to at least a part of the remuneration received by the individual from the organization for such services;

5 A part of such taxes was paid prior to September 1, 1954;

6 Such taxes as were paid before September 1, 1954, were paid by the organization in good faith and upon the assumption that it had filed a valid certificate; and

7 No refund (or credit) of such taxes has been obtained either by the employee or the employer, exclusive of any refund (or credit) which would be allowable if the services performed by the individual had constituted employment.

.02 Filing of certificate by organization.-The provisions of section 403(a) of the Social Security Amendments of 1954 are applicable even though a valid certificate on Form SS-15 is never filed by the organization. However, the organization may file a certificate which will have effect for future periods. See subsection .07 of this section.

.03 Requests under section 403(a) of the Social Security Amendments of 1954.-Except where the alternative procedure set forth in subsection .04 of this section is followed, a request of an individual under section 403(a) shall be made and filed as provided in this subsection. The request shall be in writing, shall be signed and dated by such individual, and shall include (1) the name and address of the organization, (2) the name, address, and social security account number of the individual, (3) a statement that the individual has not obtained a refund (other than a refund or credit which would be allowable if the services had constituted employment) from the District Director of Internal Revenue of any part of the employee tax under the Federal Insurance Contributions Act paid with respect to remuneration received by him from the organization for services performed after 1950 and before 1955, and (4) a request that all remuneration received by him from the organization for such services with respect to which employee and employer taxes have been paid shall be deemed to constitute remuneration for employment to the extent authorized by section 403(a) of the Social Security Amendments of 1954. The request of an individual shall be accompanied by a statement of the organization incorporating the substance of each of the seven requirements enumerated in subsection .01 of this section. The statement of the organization should also disclose the District Director with whom returns on Form 941 are filed. Such statement must be signed by the president or a principal officer of the organization who shall certify that the statement is correct to the best of his knowledge and belief. If the statement of the organization is not submitted with the individual's request, the individual shall include in his request an explanation of his inability to submit such statement. Other information may be required, but should be submitted only upon receipt of a specific request therefor. No particular form is prescribed for making the request or the statement of the organization required to be submitted with the request. The individual's request should be filed with the District Director with whom the organization files returns on Form 941, Employer's Quarterly Federal Tax Return.

.04 Filing of requests by organization.-An organization having individuals in its employ, including former employees, with respect to whom section 403(a) of the Social Security Amendments of 1954 is applicable may, if it so desires, prepare a form or forms for use by an individual or by individuals in making requests under section 403(a). Any such form shall provide space for the signature of the individual or individuals and shall contain such information as is required by subsection .03 of this section to be included in a request. Any form used by more than one individual, and any form used by one individual which is signed and returned to the organization, shall be submitted by the organization, together with its statement, as required in subsection .03, to the District Director with whom the organization files returns on Form 941. An individual is not required to use a form prepared by the organization but may, at his election, file his request in accordance with the provisions of subsection .03.

.05 Optional tax payments by the organization.-An organization may report and pay taxes under the Federal Insurance Contributions Act with respect to any portion of the remuneration paid to an individual, who is eligible to file a request under section 403(a) of the Social Security Amendments of 1954; for services performed by him subsequent to 1950 and prior to 1955 which has not been reported and which would have constituted wages if a valid certificate had been in effect during the period the services were performed and the individual had concurred in the filing of the certificate. All such remuneration with respect to which the taxes have been paid will be deemed to be wages if a proper request is filed. Such taxes may be reported as an adjustment without interest in the manner prescribed in section 408.702 and 408.703 of Regulations 128. The statement in explanation of such adjustment shall include a reference to section 403(a) of the Social Security Amendments of 1954.

.06 Taxes paid after filing of request.-The request of an individual will be effective only as to remuneration with respect to which taxes under the Federal Insurance Contributions Act are paid on or before the date on which the request is filed with the District Director.

.07 Remuneration for services after 1954.-The provisions of section 403(a) of the Social Security Amendments of 1954 have no application to remuneration for services performed after 1954. If the organization is eligible to file a certificate under section 3121(k) of the 1954 Code, as amended, and desires to have the Federal old-age and survivors insurance system established by Title II of the Social Security Act extended to services performed after 1954 by its employees, it must file a valid certificate on Form SS-15.

SEC. 6. REQUESTS OF INDIVIDUALS UNDER SECTION 403(b) OF THE SOCIAL SECURITY AMENDMENTS OF 1954.

.01 In general.-Under certain circumstances an individual, who as an employee performed services after December 31, 1950, and prior to September 1, 1954, for an organization which filed a valid certificate on Form SS,-15 but who failed to sign the list of concurring employees, may request that the remuneration received by him for such services be deemed to constitute remuneration for employment for purposes of the taxes imposed under the Federal Insurance Contributions Act and for purposes of benefits under title II of the Social Security Act. However, the provisions of section 1426(a) of the 1939 Code are applicable in determining the extent to which such remuneration will constitute wages for purposes of such taxes. In order that the remuneration may be so deemed to be remuneration for employment, it is necessary that all of the following requirements be met:

1 The individual performed some services for the organization subsequent to December 31, 1950, and prior to September 1, 1954;

2 The organization filed a valid certificate under section 1426(1) of the 1939 Code;

3 The individual's services would have constituted employment if the individual's signature had appeared on the list of employees who concurred in the filing of the certificate;

4 Employee and employer taxes imposed under the Federal Insurance Contributions Act were paid prior to September 1, 1954, with respect to at least a part of the remuneration received by the individual form the organization for such services;

5 No refund (or credit) of such taxes has been obtained either by the employee or the employer, exclusive of any refund (or credit) which would be allowable if the services performed by the individual constituted employment without regard to the provisions of section 403(b); and

6 The request is filed on or before January 1, 1957.

.02 Requests under section 403(b) of the Social Security Amendments of 1954.-Except where the alternative procedure set forth in subsection .03 of this section is followed, a request of an individual under section 403(b) shall be made and filed as provided in this subsection. The request shall be in writing, shall be signed and dated by such individual, and shall include (1) the name and address of the organization, (2) the name, address, and social security account number of the individual, (3) a statement that the individual has not obtained a refund (other than a refund or credit which would be allowable if the services had constituted employment) from the District Director of any part of the employee tax under the Federal Insurance Contributions Act paid before September 1, 1954, with respect to remuneration received by him from the organization, (4) a request that all remuneration received by the individual from the organization for services performed after 1950 and before September 1, 1954, with respect to which employee and employer taxes were paid before September 1, 1954, shall be deemed to constitute remuneration for employment to the extent authorized by section 403(b) of the Social Security Amendments of 1954, and (5) a statement that the individual understands that, upon making such request (a) he will be deemed to have concurred in the certificate which was previously filed by the organization, and (b) the employee and employer taxes will be applicable to all wages received, and to be received, by him for services performed for the organization on or after the effective date of such certificate to the extent such taxes would have been applicable if he had signed the list on Form SS-15a submitted with the certificate. The request of an individual shall be accompanied by a statement of the organization incorporating the substance of each of the six requirements enumerated in subsection .01 of this section. The statement of the organization should also disclose the District Director with whom returns on Form 941 are filed. Such statement must be signed by the president or a principal officer of the organization who shall certify that the statement is correct to the best of his knowledge and belief. If the statement of the organization is not submitted with the individual's request, the individual shall include in his request an explanation of his inability to submit such statement. Other information may be required, but should be submitted only upon receipt of a specific request therefor. No particular form is prescribed for making the request or the statement of the organization required to be submitted with the request. The individual's request should be filed with the District Director with whom the organization files returns on Form 941.

.03 Filing of requests by organization.-An organization having individuals in its employ, including former employees, with respect to whom section 403(b) of the Social Security Amendments of 1954 is applicable may, if it so desires, prepare a form or forms for use by an individual or individuals in making requests under section 403(b). Any such form shall provide space for the signature of the individual or individuals and shall contain such information as is required by subsection .02 of this section to be included in a request. Any form used by more than one individual, and any form used by one individual which is signed and returned to the organization, shall be submitted by the organization, together with its statement, as required in subsection .02, to the District Director with whom the organization files returns on Form 941. An individual is not required to use a form prepared by the organization but may, at his election, file his request in accordance with the provisions of subsection .02.

.04 Remuneration not reported as wages.-Since an individual who files a request pursuant to section 403(b) of the Social Security Amendments of 1954 will be deemed to have signed the list filed with the certificate, all services performed by him on and after the effective date of the certificate will constitute employment under the Federal Insurance Contributions Act to the same extent as if he had, in fact, signed the list. Accordingly, liability will be incurred for the employee and employer taxes imposed by the Federal Insurance Contributions Act with respect to any remuneration which constitutes wages, except to the extent the taxes have been paid with respect to such wages. District Directors shall consider requests of individuals, if found to be in proper order, to be effective immediately. Liability incurred by an organization for employee and employer taxes with respect to the wages of an individual who files a request pursuant to section 403(b) may be reported as an adjustment without interest within the time specified in sections 408.702 and 408.703 of Regulations 128. The statement in explanation of such adjustment shall include a reference to section 403(b) of the Social Security Amendments of 1954.

SEC. 7. REQUEST SIGNED BY LEGAL REPRESENTATIVE.

If the individual is deceased or mentally incompetent and the request filed pursuant to section 403(a) or (b) of the Social Security Amendments of 1954 is made by the legal representative of the individual or other person authorized to act on his behalf, the request must be accompanied by evidence showing such person's authority to make the request