The IRS is responsible for the detailed provisions of filing IRS Form 2032, Contract
Coverage Under Title II of the Social Security Act. IRS Form 2032 is for use by an
American employer to extend Social Security coverage to U.S. citizens and resident
aliens employed by its foreign affiliates. A coverage agreement is authorized under
Section 3121(l) of the Internal Revenue Code and may include all affiliates and subsidiaries,
but is not required to do so. The agreement may be amended at anytime to include additional
affiliates or subsidiaries.
The agreement must cover all U.S. citizens and residents employed by the affiliate
or subsidiary unless a totalization agreement provides otherwise.
Effective June 15, 1989, a coverage agreement may not be terminated by the employer.
The agreement will terminate for a foreign entity at the end of any quarter in which
the foreign entity ceased to be the foreign affiliate at any time in that quarter.
Prior to June 15, 1989, however, the employer could terminate a coverage agreement
by giving 2 years prior notice after the agreement was in effect for at least 8 years.