20 CFR 404.804, 404.806, and 404.807
STROH v. CELEBREZZE, CCH U.I.R. Vol. 1, Fed. Para. 15,026 (U.S.D.C., D. Mont. Billings Div., Div. No. 391 (7/16/63))
JAMESON, District Judge:
This is an action brought under Section 205(g) of the Social Security Act, as amended, 42 U.S.C.A. § 405(g), to review a "final decision" of the Secretary of Health, Education and Welfare. Both parties have moved for summary judgment, and the case is before the court upon the pleadings, the briefs of the parties, and a certified copy of the transcript of the record.
Plaintiff, from about 1946 through 1958, was self-employed in the business of constructing homes. His income from this business was not reported on his federal income tax returns from 1946 through 1957.
During the latter part of 1958 plaintiff was informed that an audit of his income tax returns for certain years, including the years 1953, 1954 and 1955 was being undertaken. Plaintiff executed agreements with the Internal Revenue Service whereby he agreed to extend the statute of limitations for the assessment of his federal income tax liability and self-employment tax liability for the years under consideration until June 30, 1960. On March 26, 1959, plaintiff paid deficiency taxes, including self-employment taxes, for the years 1953, 1954 and 1955.
Plaintiff, on September 22, 1959, made application for a Social Security Pension. The application was disallowed on the ground that plaintiff was not fully insured, in that he had an insufficient number of quarters of coverage under Section 214(a)(2)(A) of the Social Security Act, 42 U.S.C.A. § 414(a)(2)(A). It was held that the defendant need not amend nor correct his records concerning plaintiff's self-employment income for the years 1953, 1954 and 1955 because such a correction was barred by the statute of limitations. On appeal, the Appeals Council reversed as to the year 1955 and affirmed as to the years 1953 and 1954.
Section 205(c)(1)(B) of the Act, 42 U.S.C.A. § 405(c)(1)(B), provides: "For the purposes of this subsection -- * * * The term 'time limitation' means a period of three year, three months and fifteen days."
Section 205(c)(5)(F) of the Act, 42 U.S.C.A. § 405(c))5)(F), as amended, provides in part as follows:
* * *
The Appeals Council held that inasmuch as the taxes had been paid on March 26, 1959, and since this was within three years, three months and fifteen days after the close of the taxable year 1955, credit should be allowed for the taxes paid for that year; but more than three years, three months and fifteen days having elapsed since the taxable years of 1953 and 1954, no credit could be allowed on the books for the taxes paid for those years.
Plaintiff argues that the phrase "time limitation", as used in the last clause of the subparagraph quoted above, refers to the statute of limitations made applicable by the Internal Revenue Code where a taxpayer has agreed to an extension of the statute of limitations for the assessment of taxes. Plaintiff contends that the agreement to an extension of the statute of limitations until June 30, 1960, extended to that date the time in which the records could be amended.
The sole question presented concerns the interpretation of the phrase "time limitation" as used in the statute.
Section 205(c)(4)(C) of the Social Security Act, 42 U.S.C.A. § 405(c)(4)(C), provides in part as follows:
This section was interpreted by the Appeals Council in this language in the instant case:
The regulations promulgated by the Administration support the position taken by the Appeals Council. § 404.801(c) provides that "for the purposes of this subpart the term 'time limitation' means a period of 3 years, 3 months, and 15 days. * * *". Section 404.804 provides in part:
* * *
* * *
Section 404.806(f) provides that the Administration may change the records even after the expiration of the time limitation, to conform to tax returns filed with the Commissioner of Internal Revenue, except as provided in § 404.807. Section 404.806(k) provides that the Administration can include self- employment income in the records, even after the expiration of the time limitation, up to the amount of any wages that were mistakenly deleted by the Administration, provided such income is included in a return filed within the time limitation.
One exception has ben engrafted upon the general prohibition against change of the records to include self-employment taxes where the return was not filed within the time limitation. Congress has provided, by the Social Security Amendments of 1960, that the general prohibition does not apply to ministers and like persons for certain stated years. This exception was noted in § 404.807(b)(2) of the Regulations quoted supra.
While no reported cases were found passing upon the question here presented, one unreported case substantiates the position taken by the Appeals Council. In Martlew v. Ribicoff, digested in 1 CCH, UIR, para. 14, 526 (E.D. Tex. 1962), the court affirmed a decision of the Appeals Council in a case similar to the instant case. In that case the Council had said that "it is held that his agreement to an extension of the time limitation for an assessment of taxes could not also serve to extend the time limitation with respect to the correction of the earnings records under the Social Security Act".
It is true, as plaintiff contends, that it was never intended that the courts should abdicate their conventional judicial function to review, and where the administrative decision is based upon conclusions not reasonably reached upon due consideration of all relevant issues presented, or applies an arbitrary standard, or misinterprets the provisions of the Act or Regulations, the court may properly reject the administrative decision. On the other hand, administrative decisions interpreting the Act and Regulations are entitled to weight, and the administrative interpretation is controlling unless it is plainly erroneous or inconsistent with the Regulations. It cannot be said that the Appeals Council here has applied an arbitrary standard or misinterpreted the provisions of the Act or Regulations.
The statute and regulations specifically define the term "time limitation" as it is used in the portions of the statute here under consideration. Had Congress meant that the statute of limitations applicable under the Internal Revenue Code in situations such as the present one should apply, it could easily have so stated. As noted supra, one exception has been engrafted upon the general rule. plaintiff would have this court include another exception. That is not within the province of this court.
I cannot escape the conclusion that the definition of "time limitation" contained in Section 205(c)(1)(B) of the Social Security Act, 42 U.S.C.A. § 405(c)(1)(B) is applicable. It may wee be, as plaintiff contends, that the result is harsh and inequitable. That is often true in the application of statutes of limitations. Nevertheless a statute of limitations "must be strictly adhered to by the judiciary" and "(R)emedies for resulting inequities are to be provided by Congress, not by the courts".
The decision of the Appeals Council is affirmed and defendant's motion for summary judgment is granted.
 20 Code of Federal Regulations Chap. 111 Old Age and Survivors Insurance -- Subpart I Maintenance and Revision of Records of Wages and Self Employment Income § 404.801 et seq.
 Public Law 86-778; 74 Stat. 924, U.S. Code Cong. & Admin. News, 86th Cong. 2d Sess. 1960, Sec. 101(e).
 See Brannon v. Ribicoff, D. Mont. 1961, 200 F.Supp. 697, 700 and cases there cited.
 See Dowell v. Folsom, D. Mont. 1957, 157 F.Supp. 46, 51, and cases there cited.
 Kavanagh v. Nobel, 1947, 332 U.S. 536, 539, 68 S.Ct. 235, 92 L.Ed. 150.
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