I-2-2-35.Earnings-Related Issues the Administrative Law Judge May and May Not Address — Jurisdiction

Last Update: 8/15/05 (Transmittal I-2-61)

A. Social Security Administration (SSA) Jurisdiction

  • SSA has authority to determine what constitutes “wages” and “self-employment income” for Social Security purposes.

  • SSA has limited authority, under Section 218 of the Social Security Act, to make determinations regarding the Federal Insurance Contributions Act (FICA) tax liability for wages paid before January 1, 1987. This authority extends only to employees covered by Federal/State agreements entered into pursuant to section 218 of the Act.

B. Internal Revenue Service (IRS) Jurisdiction

  • IRS has authority to make determinations regarding FICA tax liability for wages paid January 1, 1987 or thereafter. Section 9002 of the Omnibus Budget Reconciliation Act of 1986 (P.L. -509), enacted on October 21, 1986, transferred jurisdiction to IRS with respect to wages paid, under an agreement pursuant to section 218 of the Act, after December 31, 1986.

    If a request for hearing includes or is based on tax issues (amounts, liability, withholding, refunds, etc.) for wages paid January 1, 1987 or thereafter, the request, with respect to such issues, should be dismissed for lack of jurisdiction. The dismissal notice should inform the claimant that only IRS may resolve tax issues. (See I-2-4-30, Dismissal — No Right to a Hearing.)