TN 19 (03-15)
RS 02101.810 SSA and IRS Responsibilities for Employment Determinations
20 CFR 404.1007(d)
A. SSA and the IRS make independent employment determinations
Social Security’s Regulations at 20 CFR 404.1007(d) state “If there is a question about whether you are working as an employee or are self-employed, we or the Internal Revenue Service (IRS) will make a determination after examining all of the facts of your case.” We will make an independent employer-employee relationship determination to establish a worker’s coverage status or to resolve earnings discrepancies. IRS makes an independent employer-employee relationship determination to establish a worker’s obligation to make Federal Insurance Contributions Act (FICA) contributions and for tax withholding purposes. We will make our own employment determination, regardless if there is an existing IRS determination.
B. SSA procedure for making employment determinations
To maintain accurate earnings records for workers, we make employment determinations to establish an individual’s coverage status or to resolve earnings discrepancies. Workers can request such a determination at their local field office (FO) if they disagree with the information on their earnings record (i.e., there are no earnings on the earnings record and the worker believes there should be reported earnings). The FO may use Form SSA-7160 (Employment Relationship Questionnaire) to make the employment determination. The FO will request the worker and his or her alleged employer to complete this form to determine the worker's employment status. If necessary, obtain a legal opinion from OGC to assist in making an employment determination. For information on coverage development in employer-employee cases, see RS 02101.800.
C. Employment determinations for state and local government cases
According to Section 218, a position cannot be covered under a Section 218 Agreement unless that position is filled by an “employee.” For state and local government employment cases, the regional office (RO) must determine that a worker in a state or local government position is an employee in order to resolve whether the position in question is covered for social security under a state’s Section 218 Agreement. We make this employer-employee relationship determination independent of IRS. If necessary, obtain a legal opinion from OGC to assist in making the determination.
We have exclusive responsibility for determining if a position is covered by a Section 218 Agreement. Employer-employee relationship determinations by the IRS do not have any effect on our independent analysis or determination in these cases (see RS 02101.810E in this section). For more information on Section 218 Agreements, see SL 30001.301.
D. IRS procedure for making employment determinations
The IRS determines the identity of the employer for purposes of tax withholding. The IRS provides employment determinations by:
Issuing Private Letter Rulings (PLRs); or
Asking workers or employers to complete the IRS Form SS-8 (Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding).
E. IRS determinations or rulings on employer-employee relationships
FOs do not need to ask for copies of IRS determinations or rulings on employer-employee relationships. If the IRS offers a copy, the FO can accept it for the file, but make its own independent employment determination. Never defer to the IRS’ determination that a worker is, or is not, an employee. The IRS may make their employment determination based on tax liability. Our employment determination is for social security coverage purposes.