RS PHI01802.274 Documenting Constructive Notification (06 - 2008)
A. Introduction
When an individual files for the religious exemption/waiver (i.e., Form 4029) discussed in RS 01802.273, he/she agrees to notify the Internal Revenue Service (IRS) in writing if an event occurs indicating that he/she is no longer a member of the religious group to which the exemption/waiver applies. This notification is to occur within 60 days of the cessation event.
If a claimant for Title II benefits with an exemption in force alleges that a cessation event occurred but that he/she never officially notified the IRS in writing of the event, it is possible that we can pay benefits if the constructive notification requirements discussed in RS 01802.274D are met. The purpose of this instruction is to provide guidelines on documenting that a cessation event occurred.
B. Procedure
Whenever a claimant who filed a Form 4029 with the IRS alleges that a cessation event occurred, the claimant should complete a SSA-795 or its equivalent covering the following:
The nature of the cessation event, the date it occurred, and whether or not the cessation event is still in force. For example: “I left the Amish sect on July 17, 1984. I continue to have no association with the sect.”
Why he/she didn't notify the IRS of the cessation event. For example: “I didn't notify the IRS that I left the Amish sect because I didn't know I was required to do so.”
Whether or not he/she was advised by his/her tax accountant that the filing of tax returns would nullify the Form 4029.
If the claimant has SEI posted to his/her earnings record for any year after the Form 4029 was approved, why a SEI tax return was filed and SECA taxes were paid. For example: “I filed a SEI tax return for 1997 and years following because I earned SEI and was no longer a member of the Amish sect.”
If the claimant has wages posted to his/her earnings record for any year after the Form 4029 was approved, whether or not any of the employers who paid those wages were exempt from withholding FICA taxes from their employees' wages as explained in RS 01901.680.
This documentation is required in 1) initial claims; and 2) in appeals of claims denied because SSA could not find that constructive notification occurred. It will serve as the basis for making a constructive notification decision.