I-2-2-35.Jurisdiction in Cases Involving Earnings Issues
Last Update: 12/6/17 (Transmittal I-2-214)
A. Wages and Self-Employment
The Social Security Administration (SSA) has authority to determine what constitutes wages and self-employment income for Social Security purposes.
For basic information about wages, see Program Operations Manual System (POMS) RS 01400, and specifically RS 01401.030 and SL 70001. For basic information about coverage of self-employment, see POMS RS 01800. For self-employment income specifically, see POMS RS 01804.001.
B. Federal Insurance Contributions Act (FICA) Tax Liability
SSA has limited authority, under section 218 of the Social Security Act, to make determinations regarding FICA tax liability for wages paid before January 1, 1987. However, this authority extends only to employees covered by Federal or State agreements entered into pursuant to section 218 of the Act.
Section 9002 of the Omnibus Budget Reconciliation Act of 1986 (P.L. 99-509), enacted on October 21, 1986, transferred jurisdiction to the Internal Revenue Service (IRS) with respect to wages paid after December 31, 1986. Therefore, the IRS has authority to make determinations regarding FICA tax liability for wages paid on or after January 1, 1987.
If a request for hearing is based on FICA tax issues (e.g., amounts, liability, withholding, refunds, etc.) for wages paid on or after January 1, 1987, an administrative law judge (ALJ) will dismiss the request for hearing. In the dismissal notice, the ALJ will inform the claimant that only the IRS may resolve the tax issues. For more information about dismissals based on no right to a hearing, see Hearings, Appeals and Litigation Law manual I-2-4-30.
When the ALJ retains jurisdiction over other issues involved in the claim(s), the ALJ may dismiss the request for hearing with respect to the FICA tax issues and issue a decision on the remaining issues.