Petition for Writ of Certiorari — Acierno v. Barnhart, 127 S. Ct. 2981 (2007) (No. 06-1416)
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No, 061416 SPR 2 © 2007
Iu the OFFICE GF THE CLERK
Suprenie Court of the United States
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VINCENT JAMES ACIERNO.
Petitioner,
¥,
COMMISSIONER OF SOCIAL SECURITY
ADMINISTRATION,
Respondent.
ON PETITION FOR WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
DOUGLAS F. BRODER
Counsel of Record
KIRKPATRICK & LOCKHART
PRESTON GATES ELLIs LLP
Attorneys for Petitioner
599 Lexington Avenue
New York. New York 10022-6030
(212) 536-4808
SARAH P. KENNEY
Of Counsel
QUESTION PRESENTED
Whether federal courts have power to equitably toll
the limitations period set forth in Section 405(c)(4) of the
Social Security Act for disability benefit claimants whose
disabilities, or other circumstances beyond their control, have
prevented them from timely filing tax returns needed to
establish their eligibility for benefits?
LIST OF ALL PARTIES
The parties to the proceeding in the United States
Court of Appeals for the Second Circuit were Vincent James
Acierno, the petitioner herein, and Jo Anne B. Barmhart,
Commissioner of the Social Security Administration
(“SSA”), the respondent herein.
Page
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TABLE OF CONTENTS
THE DECISION BELOW CONFLICTS WITH
THE REASONING AND SPIRIT OF PRIOR
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APPENDIX
Opinion of the United States Court of Appeals
for the Second Circuit, entered Jan. 24, 2007........... A-l
Opinion and Order of the United States District
Court for the Eastern District of New York,
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Decision of the Social Secunty Administration,
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CesC tee... A-39
TABLE OF AUTHORITIES
CASES _ PAGE
Acierno v. Barnhart,
Be Fe a NG EE Pious niisesdserassussionsodvuisdielakganciousevels |
Bowen v. City of New York,
476 U.S. 467 (1986) .............. RUPEE Peet eee eT 9, 10
Church of the Holy Trinity v. United States,
RP SUEY SED sons sandnrtusncsacsvockensvubtsuvreaveainoeisenemouabniny 9
Conklin v. Celebrezze,
ee TI Rael. Pp erecsvcisniscsencevievensmnatcbvaeees 9,11
Cutler v. Weinberger, ,
Ee ae RO Ge BFE sisssncensvnrsoncecanitavesendponbeseays 11
Damon v. Sec'y of Health, Educ. & Welfare,
Be ee CAPs CPT EU iidcicrossncnrsicvvarcdicinnbierennseibaal 9,10
Haberman v. Finch,
EU TO CRE, WIG vcvinincecccccsscssstccieseveess 9,10, 11
Heckler v. Day,
467 US. 104 (1984) «0... ssisieaibaasanten Pebiiinieadets 9
Hollman y. Dep't of Health & Human Servs.,
SU em EP NO 8 IE es ovccieosvnncvetvevenrandedunsasvstesesmanst 9
McCuin vy. Sec'y of Health & Human Servs.,
ee ee Pe AE le COED sincere ine cere 9,11
Petitioner Vinc: ames Acierno respectfully prays
that a writ of certiorari issue to review the judgment and
‘ opinion of the United States Court of Appeals for the Second
Circuit entered in this proceeding on January 24, 2007.
OPINIONS BELOW
The opinion of the United States Court of Appeals for
the Second Circuit is reported at 475 F.3d 77 (2d Cir. 2007).
The opinion of the United States District Court for the
Eastern District of New York, which is unreported, appears
in the Appendix hereto. (A-13.) Also unreported and
included in the attached appendix is the decision by
Administrative Law Judge Peter F. Crispino, issued after a
hearing, that became the final decision of the Commissioner
of Social Security. (A-31.)
JURISDICTION
The Court of Appeals for the Second Circuit entered
judgment in this action on January 24, 2007. This petition
for certiorari was filed within 90 days of that date. The
jurisdiction of this Court is invoked under 28 U.S.C.
§ 1254(1).
STATUTORY PROVISIONS INVOLVED
Section 405(c)(1)(B) of the Social Security Act
provides:
(c) Wage records
(1) For the purposes of this subsection . . .
(B) The term "time limitation" means a
period of three years, three months, and
fifteen days.
42 U.S.C. § 405(c)(1)(B).
Section 405(c)(4) of the Social Security Act provides:
(4) Pnor to the expiration of the time
limitation following any year _ the
Commissioner of Social Security may, if it
is brought to the Commissioner's attention
that any entry of wages or self-employment
income in the Commissioner's records for
such year is erroneous or that any item of
wages or self-employment income for such
year has been omitted from such records,
correct such entry or include such omitted
item in the Commissioner's records, as the
case may be. After the expiration of the
time limitation following any year--
(A) the Commissioner's records (with
changes, if any, made pursuant to paragraph
(5S) of this subsection) of the amounts of
wages paid to, and self-employment income
derived by, an individual during any period
in such year shall be conclusive for the
purposes of this subchapter;
(B) the absence of an entry in the
Commissioner's records as to the wages
alleged to have been paid by an employer to
an individual during any period in such year
shall be presumptive evidence for the
purposes of this subchapter that no such
alleged wages were paid to such individual
in such period; and
(C) the absence of an entry in the
Commissioner's records as to the self-
employment income alleged to have been
derived by an individual in such year shall
be conclusive for the purposes of this
subchapter that no such alleged self-
employment income was derived by such
individual in such year unless it is shown
that he filed a tax return of his self-
employment income for such year before
the expiration of the time limitation
following such year, in which case the
Commissioner of Social Security shall
include in the Commissioner's records the
self-employment income of such individual
for such year.
42 U.S.C. § 405(c)(4).
Section 405(c)(5) of the Social Security Act provides, in
pertinent part:
(5) After the expiration of the time
limitation following any year in which
wages were paid or alleged to have been
paid to, or self-employment income was
derived or alleged to have been derived
by, an individual, the Commissioner of
Social Security may change or delete any
entry with respect to wages or self-
employment income in the
Commissioner's records of such year for
such individual or include in_ the
Commissioner's records of such year for
such individual any omitted item of
wages or self-employment income but
only....
42 U.S.C. § 405(c)(5) (emphasis added). This section then
~ lists 10 exceptions to the filing requirement, none of which
are relevant to this petition. The entire section is reproduced
in the Appendix hereto. (A-39.)
STATEMENT OF THE CASE
Petitioner, Vincent James Acierno, a mentally
disabled individual, seeks review of a Second Circuit ruling
that denied his request that it equitably toll the Social
Security Act limitations period for filing self-employment tax
returns. That refusal rendered Mr. Acierno ineligible for
social security disability benefits. The Second Circuit
acknowledged that it was Mr. Acierno's disability that
prevented him from timely filing his tax returns. (A-11.)
But, despite evincing sympathy for Mr. Acierno’s plight, it
held that it lacked the power to toll the limitations period.
(A-11.)
For reasons explained below, Mr. Acierno believes
the lower court could and should have exercised its equitable
powers to right this wrong. He urges this Court to grant a
writ of certiorari and overturn the lower court's decision.
A. Regulatory Background
A claimant must qualify both as (1) “insured” and (2)
“disabled” to qualify for social secunty disability insurance
benefits. See 42 U.S.C. § 423(a)(1). A claimant who, like
Mr. Acierno, becomes disabled after reaching age 31
qualifies as “insured” if he (a) would have been a fully
insured individual if he had attained age 62 and properly filed
his application for benefits, and (b) worked at least 20 of the
40 quarters preceding, and including, the quarter in which the
onset of his disability occurred (the “20/40 Rule’). See
42 U.S.C. § 423(c)(1); 20 C_F.R. §§ 404.130, 404.131.
Satisfaction of the 20/40 Rule is based on a
claimant’s “Earnings Record,” which the Commissioner of
Social Security (the “CCommissioner’”) develops from each.
claimant’s tax returns. See 42 U.S.C. § 405(c)(2)(A). The
Commissioner will include self-employment income from a
given year in a claimant’s Earnings Record only if the tax
return for that year was filed within the three years, three
months, and fifteen days limitations period in 42 U.S.C.
§ 405(c)(4) (“§ 405(c)(4)”). See 42 U.S.C. § 405(c)(1)(B)
(defining the limitations period). Section 405(c)(5) of the
Social Security Act lists exceptions to that filing requirement.
42 U.S.C. § 405(c)(S). None of those exceptions, however,
apply to self-employed claimants whose disabilities, or other
circumstances beyond their control, prevented them from
filing their returns within the statutory limitations period.
B. Factual Background
Mr. Acierno worked as a janitor in 1992 and 1993,
the years in dispute here. The lower courts and the
Commissioner treated Mr. Acierno’s income earned during
those years as self-employment income. (A-7; A-19 — A-20;
A-37.)
During the limitations periods for the 1992 and 1993
tax years, Mr. Acierno suffered from severe mental illness,
including bipolar diserder, anxiety, and affective disorders.
(A-4.) He was hospitalized on and off throughout that
period. He suffered from a severe manic episode from
January through August 1993, resulting-in his involuntary
hospitalization for a month. He was also hospitalized in
January and October of 1996.
Shortly thereafter, on December 24, 1996, Mr.
Acierno followed the advice of his doctors and stopped
working. His doctors believe it is unlikely he will ever be
able to return to work.
In addition to mental illness, Mr. Acierno suffered
from Cerebral Metabolic Disorder (“CMD”) caused by
chemotherapy treatments for testicular cancer. (A-4.) CMD
inhibited Mr. Acierno’s brain functioning. Because of his
CMD and mental illness, Mr. Acierno could not, and cannot,
perform even simple, routine tasks such as driving, paying
bills, attending church, or being in crowds. (A-4.) His
condition also rendered Mr. Acierno unable to prepare his tax
returns. (A-11.)
Although he was assisted by an accountant, Mr.
Acierno was unable to file his 1992 and 1993 returns until
December 1997. The limitations periods for those tax years
expired on Apnil 15, 1996 and April 15, 1997, respectively.
The IRS accepted Mr. Acierno’s 1992 and 1993 returns as
sufficient evidence of income he earned during those years.
Jurisdiction Below and the Decisions Below
Jurisdiction in the district court and the court of
appeals was appropriate pursuant to 42 U.S.C. §§ 405(c)(9)
and 405(g) because Mr. Acierno’s claim concerned a final
decision of the Commissioner issued after a hearing to which
Mr. Acierno was a party, and Mr. Acierno resided within the
Eastern District of New York. Jurisdiction in the
administrative tribunal was proper pursuant to 42 U.S.C.
§ 405(b)(1).
1. The Commissioner and the District
Court Deny Mr. Acierno’s Claim For
Disability Benefits
Mr. Acierno (through his wife) filed an application
for disability benefits in April 1998. The SSA Office of
Disability and International Operations denied his application
eight days later. That denial was upheld at each level of the
administrative review process, including a decision issued by
an administrative law judge (“ALJ”) after a hearing. After
the SSA Appeals Council denied Mr. Acierno’s request to
review the ALJ’s decision, that decision became the final
decision of the Commissioner.
Having exhausted his administrative remedies, Mr.
Aciemo appealed to the United States District Court for the
Eastern District of New York, which affirmed the
Commissioner’s decision. Both the Commissioner and the
district court limited their analyses to Mr. Acierno’s failure to
timely file his tax returns. Neither the Commissioner nor any
fact-finder below challenged Mr. Acierno’s claim on any
other ground.
2.The Court of Appeals Reluctantly
Affirms
Mr. Acierno appealed to the United States Court of
Appeals for the Second Circuit. in ruling on Mr. Acierno’s
appeal, the Second Circuit acknowledged that Mr. Acierno
worked in 1992 and 1993. (A-5.) It also acknowledged that
his mental illness prevented him from timely filing his tax
returns for those years:
a man whose mental illness
prevents him from working, and
who in fact qualifies for
disability coverage, nonetheless
receives no disability benefits
because he filed his tax returns
too late — an error due in large
part to his affliction.
(A-11.)
Nevertheless the Second Circuit affirmed the district
court’s decision, stating that it lacked the power to impose an
equitable toll: “the history, text, and structure of § 405(c)
compel us to hoid that equitable tolling does not apply to that
provision. Only Congress can amend the statute to provide
otherwise.” (A-3.) The court reasoned that the phrase “but
only” preceding the list of exceptions set forth in § 405(c)(5)
(which does not include any cquitable exceptions for self-
employed claimants) suggested Congress’s intent to make
that list exclusive.
The lower court also explained that Congress was
concerned that self-employed claimants would file “spunous
or merely inaccurate and unvenfiable claims [of coverage}
based on after-the-fact evidence” and had therefore created a
conclusive presumption that, after expiration of the
limitations period for a given year, a claimant earned no self-
employment income for that year if there was no Earnings
Record entry for it. (A-9.) At the same time, the lower court
expressed dissatisfaction with its decision, stating: “the result
in this case seems harsh tous... .” (A-11.)
REASONS FOR GRANTING THE WRIT
This Court should grant the requested wnt for three
reasons: (1) the decision below conflicts with rulings of this
Court, and other federal courts, that consistently interpret the
Social Security Act broadly and employ tolling and other
equitable exceptions to provide coverage to deserving
beneficiaries in cases where the language of a statutory
provision may otherwise preclude coverage; (2) the lower
court’s ruling directly conflicts with that of the only other
federal court to decide whether it had the authority to
equitably toll the statutory provision in question; and (3) the
issue 1s one of grave importance to those potential social
security beneficiaries affected.
I. THE DECISION BELOW CONFLICTS WITH
THE REASONING AND SPIRIT OF PRIOR
DECISIONS OF THIS COURT AND
NUMEROUS FEDERAL COURTS-
The decision below is inconsistent with reasoning
employed by this Court and numerous other federal courts in
cases, like this one, where plainly deserving claimants have
been denied benefits based on unfair or overly technical
readings of the Social Security Act. Citing Congress’s
clearly expressed intent that the Act be read broadly to favor
claimants, the courts have consistently overturned such
unfairly restrictive decisions by asserting their equitable
power to toll, or otherwise create exceptions to, Social
Security Act provisions. See, e.g., Bowen v. City of New
York, 476 U.S. 467 (1986) (unanimous court); Damon vy.
Sec’y of Health, Educ. & Welfare, 557 F.2d 31 (2d Cir.
1977); Haberman vy. Finch, 418 F.2d 664 (2d Cir. 1969);
Conklin v. Celebrezze, 319 F.2d 569 (7th Cir. 1963); McCuin
v. Sec’y of Health & Human Servs., 817 F.2d 161 (1st Cir.
1987).
A. This Court’s Decision In Bowen vy. City of
New York
In Bowen, this Court explained that courts may
equitably toll a statute of limitations so long as tolling is
consistent with congressional intent in enacting the relevant
statutory scheme. 476 U.S. at 479; see Hollman v. Dep't of
Health & Human Servs., 696 F.2d 13, 16 (2d Cir. 1982)
(characterizing § 405(c)(4) as a statute of limitations). The
Court, reasoning that Congress designed the Social Security
Act to be “unusually protective of claimants’, equitably
tolled § 405(g) of the Social Security Act for mentally
disabled claimants faced with a covert agency policy
regarding eligibility criteria. 476 U.S. at 480 (quoting
Heckler v. Day, 467 U.S. 104, 106 (1984)).
This Court further explained that tolling § 405(g) was
“consistent with the overall congressional purpose and is
nowhere eschewed by Congress.” /d. at 480 (internal
quotation omitted); see also United States v. Am. Trucking
Ass'ns, Inc., 310 U.S. 534, 543-44 (1940) (explaining that
legislative purpose is more important to a_ statute’s
interpretation than the plain meaning of its language); see
also Public Citizen v. Dep't of Justice, 491 U.S. 440, 454-55
(1989) (discussing the importance of interpreting a statute in
accordance with congressional intent); Church of the Holy
Trinity v. United States, 143 U.S. 457, 460 (1892) (“If a
10
literal construction of the words of a statute be absurd, the act
must be so construed as to avoid the absurdity.”); United
States v. Kirby, 74 U.S. 482, 486 (1868) (“General terms
should be so limited in their application as not to lead to
injustice, oppression, or an absurd consequence.”).
Although the provision at issue here, § 405(c)(4), is
not the same provision examined in Bowen, the court below
could and should have applied the same reasoning. Both
provisions are located in the same statute — a statute Congress
designed to be protective of claimants. And nothing in the
language of § 405(c)(4) or in its legislative history states that
Congress intended to preclude equitably tolling that
provision.
The Second Circuit wrongly read the legislative
history as indicating that Congress did not want equitable
tolling to apply to § 405(c)(4). There is evidence Congress
was concemed that self-employed claimants would submit
faulty tax returns after expiration of the limitations penod.
But there 1s no evidence that Congress had the same concem
about claimants, like Mr. Acierno, who were unable to timely
file by virtue of the very disabilities that made them eligible
for benefits in the first place.
B. Other Federal Court Decisions
The lower court’s decision also conflicts with other
federal courts that have read exceptions into the Social
Security Act to uphold the Act’s overall, remedial purpose.
In Damon, the Second Circuit itself interpreted the
Act broadly to award benefits to an adopted child. 557 F.2d
at 34-35. And in Haberman, that same.court created an
exception to award student benefits to a claimant who would
not otherwise qualify, reasoning that (i) the claimant
belonged to the class of people Congress intended to benefit
from the Social Security Act provision at issue, and (11)
1]
courts must apply the Act broadly to aid intended
beneficiaries. 418 F.2d at 667.
The Seventh Circuit, in Conklin, applied the Social
Security Act broadly to “accomplish its moral purpose” and
awarded the claimant old age insurance benefits, even though
she was ineligible for such benefits under a technical reading
of the statute. 319 F.2d at 571 (internal quotation omitted).
The court reasoned that it was unlikely Congress intended
such a result. /d.
In McCuin, the First Circuit relied in part on the
remedial nature of the Social Security Act to find in favor of
a Medicare claimant when the regulations underlying the
claim were promulgated under the Social Secunty Act. 817
F.2d at 174. That court explained that holding otherwise
would frustrate Congress’s intent to interpret regulations
promulgated under that Act consistently with the Act’s
“beneficent purposes.” /d.
Similarly, the Fifth and Second Circuits have relied
on the Social Secunty Act’s remedial, beneficent purpose to
allow claimants to introduce new evidence at the appellate
level for consideration on remand. Williams v. Califano, 590
F.2d 1332, 1334 (Sth Cir. 1979); Cutler v. Weinberger, 516
F.2d 1282, 1285-87 (2d Cir. 1975).
Like the courts of appeal, district courts have read
exceptions into the Social Security Act when necessary to
achieve the Act’s beneficent purpose. See, e.g., Schmiedigen
v. Celebrezze, 245 F. Supp. 825 (D. D.C. 1965). In
Schmiedigen, the United States District Court for the District
of Columbia relied on the Social Secunty Act’s benevolent
purpose to award old age survivor’s insurance benefits to a
mentally incompetent woman, to whom the Commissioner
had denied benefits in effect because of her mental
incompetence. /d. at 827.
12
Although the claimant was technically ineligible for
benefits because she resided in a mental institution rather
than with her husband when he died, the court held that an
exception was necessary to construe the Social Security Act ~
reasonably and achieve its broad, remedial purpose. The
court reasoned: “by necessary and inescapable implication,
an exception should be read into the law for individuals who
through mental illness are bereft of responsibility for their
actions.” Jd.
Il. THE HOLDING OF THE DECISION BELOW IS
IN DIRECT CONFLICT WITH THAT OF
ANOTHER FEDERAL COURT
The court of appeals’ decision also conflicts with the
only other decision to rule specifically on whether a federal
court has the power to equitably toll the limitations period in
§ 405(c)(4). See Smith v. Shalala, 910 F. Supp. 152 (D. N.J.
1995). In Smith, the claimant’s abusive husband had forced
her to sign their joint tax returns — which failed to report her
self-employment income — without allowing her to review or
edit them. /d. at 155. Later, the Social Security
Administration denied her claim for disability benefits solely
because she had failed to timely file returns showing her self-
employment income. /d. at 158.
The district court overturned the Commissioner’s
ruling and remanded the case to the Commissioner with
instructions to (i) consider the facts that prevented Smith
from having the control needed to timely file her returns; and
(ii) determine the length of the tolling period. /d. at 160. If,
after that determination, Smith’s amended returns were
timely filed, then the Commissioner was required to amend
Smith’s Earnings Record to include her self-employment
earnings from those years. /d.
The court reasoned that, where circumstances
prevented a claimant from having the control needed to file
APPENDIX
13
her tax returns within the § 405(c)(4) limitations period,
tolling “best effects the purposes of the [Social Security]
Act.” /d. at 159. It determined that Congress only intended
to preclude the amendment of self-employed claimants’
Earnings Records outside the limitations period for claimants
who controlled the reporting of their income during that
period. /d. at 159-60.
fil. THIS CASE PRESENTS AN IMPORTANT
PUBLIC POLICY ISSUE
Exercise of this Court’s equitable powers to toll the
limitations period here is necessary to prevent an absurd
outcome, and one that Congress surely never intended — the
denial of disability benefits to individuals because they are
too disabled to timely complete the necessary paperwork.
For those affected, this is a matter of grave importance and
manifest unfaimess.
Mr. Acierno urges this Court to grant certiorari and
correct the injustice done to him and to others similarly
situated. }
4
CONCLUSION
For these reasons, a writ of certiorar’ should issue to
review the judgment and opinion of the Second Circuit Court
of Appeals.
Respectfully submitted,
Douglas F. Broder
Counsel of Record
KIRKPATRICK & LOCKHART
PRESTON GATES ELLIS LLP
Attorneys for Petitioner
599 Lexington Avenue
New York, New York 10022-6030
212.536.4808
Fax: 212.536.3991
Sarah P. Kenney
Of Counsel
April 20, 2007
A-1
UNITED STATES COURT OF APPEALS
: FOR THE SECOND CIRCUIT
August Term, 2006
(Argued: January 16, 2007 Decided: January 24, 2007)
Docket No. 03-6217-cv
VINCENT JAMES ACIERNO,
Plaintiff-Appellant,
JO ANNE B. BARNHART, COMMISSIONER
OF SOCIAL SECURITY ADMINISTRATION,
Defendant-Appellee.
Before:
STRAUB and WESLEY, Circuit Judges, and
UNDERHILL, District Judge.”
Appeal from a final judgment of the United States Distnct
Court for the Eastern District of New York (Allyne R. Ross, °
Judge), holding that equitable tolling does not apply to the
limitations period for amending records that determine a
self-employed individual’s eligibility for Social Secunty
disability coverage, set forth at 42 U.S.C. § 405(c)(1)(B),
(c)(4). We agree that equitable tolling is inconsistent with
Congress’s intent in enacting § 405(c)(1)(B), (c)(4).
AFFIRMED.
* Stefan R. Underhill of the United States District Court for the District of
Connecticut, sitting by designation.
A-2
SARAH KENNEY, Kirkpatrick & Lockhart Nicholson
Graham LLP (Douglas F. Broder, on the brief), New York,
N.Y., for Plaintiff-Appellant.
JOHN M. KELLY, Special Assistant United States
Attorney (Roslynn Mauskopf, United States Attorney,
Eastern District of New York, Varuni Nelson and Kathleen
A. Mahoney, Assistant United States Attorneys, on the brief),
New York, N.Y., for Defendant-Appellee.
STRAUB, Circuit Judge:
Plaintiff-Appellant Vincent James Acierno appeals from
an August 18, 2003 judgment of the United States District
Court for the Eastern District of New York (Allyne R. Ross,
Judge) granting judgment on the pleadings and adminis-
trative record in favor of Defendant-Appellee Jo Anne B.
Barnhart, the Commissioner of Social Security. The Commis-
sioner originally denied Acierno’s claim for social security
disability benefits on the ground that he was not “insured”
under the Social Security Act, 42 U.S.C. §§ 301-1397}j, as
amended. See 42 U.S.C. § 423(c)(1) (requiring and defining
insured status). On judicial review of the Commissioner’s
denial, Acierno claimed that he lacked insured status only
because his mental illness prevented him from filing his tax
returns within the time period set forth at 42 U.S.C. §
405(c)(1)(B), (c)(4), and that the Commissioner committed
an error of law by failing to toll the limitations period due to
his affliction. In an unreported decision, the District Court
concluded that the doctrine of equitable tolling was incon-
sistent with the congressional intent animating § 405(c)(1)(B),
(c)(4) and therefore dismissed Acierno’s complaint.
A-3
The precise issue on appeal is whether the limitations
period set forth at § 405(c)(1)(B), (c)(4) may be equitably
tolled. While Acierno’s personal circumstances are sym-
pathetic and the result we reach today is harsh, the history,
text, and structure of § 405(c) compel us to hold that
equitable tolling does not apply to that provision. Only
Congress can amend the statute to provide otherwise.
BACKGROUND
I. Social Security Eligibility
An individual’s eligibility for social security disability
benefits depends on how much he has worked and earned in
the 10 years prior to applying for benefits. Those whose work
and income history qualify them for coverage achieve
“insured” status under the Social Security Act. 42 U.S.C. §
423(a)(1)(A), (c)(1). As is relevant here, to achieve such
status, one must accumulate 20 or more calendar “quarters of
coverage” within the 40 calendar quarters prior to filing for
benefits. 42 U.S.C. § 423(c)(1)(B)(1). This is known as the
20/40 Rule.” A “quarter of coverage” is a period of three
months during which one earns a certain amount of money
in either wages or self-employment income.’ 42 U.S.C. §
413(a).
In order to keep track of who qualifies for coverage, the
Commissioner of Social Security must maintain records
of the wages and self-employment income earned by each
individual assigned a social security number. 42 U.S.C. §
405(c)(2)(A). In the case of wage earners, the Commissioner
typically obtains this information from W-2 forms filed by
the employer. See Yoder v. Harris, 650 F.2d 1170, 1174 n.4
(10th Cir. 1981). Regarding the self-employed, the Commis-
sioner gleans this information from tax returns. /d. at 1173.
' Each year the Commissioner sets the required amount by or on Novem-
ber 1. 42 U.S.C. § 413(d)(2).
A-4
The absence of any entry in the Commissioner’s records is
evidence that an individual earned no income for the penod
in question, and therefore did not earn any quarters of
coverage. 42 U.S.C. § 405(c)(3).
if the Commissioner’s records are incorrect, a person has
a limited time within which to correct them. Generally, a
person must act to correct errors within three years, three
months, and 15 days following the end of the calendar year
to which the errors relate. 42 U.S.C. § 405(c)(1)(B), (c)(4).
After that limitations period, if the Commissioner’s records
show no entry for wages paid, those records are presumptive
evidence that the person received no wages during the year in
question. 42 U.S.C. § 405(c)(4)(B). Importantly, if after the
end of the limitations period the Commissioner’s records
show no entry for self-employment income, those records are
conclusive evidence that the person received no such income
during the year in question, unless the person can show
that he filed a tax return for the relevant year within the
limitations period, or one of a handful of narrow exceptions
applies. 42 U.S.C. § 405(c)(4)(C), (c)(5). If the person has
filed a tax return within the limitations pernod, then the Com-
missioner shall correct her records accordingly. 42 U.S.C.
§ 405(c)(4)(C).
Il. Acierno’s Iliness and Failure to File Tax Returns
In 1990, Acierno was diagnosed with testicular cancer, for
which he received chemotherapy. According to his doctors,
as a side effect of his chemotherapy he developed “signifi-
cant psychiatric problems, including depression, anxiety, and
manic behavior” that made it difficult for him to “attend to
his own personal affairs’”” and robbed him of the ability to
“understand and/or perform the obligations of everyday life.”
A-5
Although Acierno managed to work for some portions
of 1992 and 1993, the record offers conflicting evidence as
to whether he was a wage earner or self-employed. His
tax returns for those years reflect his income as “self-
employment fees.” Further, in communications with the
Social Security Administration, he repeatedly set forth that
he was self-employed at that time. However, at his hearing
before an administrative law judge, he testified that he was
a wage earner during 1992 and 1993.
In either event, Acierno did not file his 1992 and 1993
tax returns until December 1997, after the limitations period
expired as to both years. As a result, the Commissioner
recorded no income for Acierno during those years and
awarded him no quarters of coverage. Acierno claims that
he failed to timely file his tax returns because of the mental
illness from which he was suffering, which became so acute
in 1993 that he was hospitalized for manic and paranoid
behavior. He also claims that he did not timely file because
his accountant, without considering the consequences for his
social security eligibility, advised his wife that Acierno did
not need to consider any “statute of limitations” for filing tax
returns since he would not be requesting a refund and since,
as a practical matter, it would take a long time to reconstruct
the necessary information with little or no input from
Acierno, who was too ili to assist.
By the close of 1996, Acierno’s physical and mental
condition had deteriorated to the point where he could no
longer work, and shortly thereafter he filed for social security
disability benefits. After a hearing, an administrative law
judge denied his application on the ground that he was
not insured under the Social Security Act because he did
not satisfy the 20/40 Rule. The administrative law judge
determined that Acierno was self-employed in 1992 and
1993; he failed to file his 1992 and 1993 tax retums within
the limitations penod, which created a conclusive, statutory
A-6
presumption that he did not earn any self-employment
income during those years; as a result, he failed to accrue any
quarters of coverage for those years; and due to that failure,
he had not accrued the required 20 quarters of coverage
within the last 40 calendar quarters. Acierno subsequently
sought review by the Social Security Administration Appeals
Council, which denied his request. — —
lil. The District Court Decision
Proceeding pro se, Acierno sought review of the agency’s
denial in the District Court for the Eastern District of
New York. In September of 2002, the Commissioner moved
for judgment on the pleadings and the administrative record,
pursuant to 42 U.S.C. § 405(g). Despite multiple extensions
and at least one warning that the District Court would decide
the pending motion if Acierno failed to submit opposition
papers, Acierno failed to file responsive papers. In August of
2003, the District Court decided the motion unopposed.
The District Court first considered whether the adminis-
trative law judge erroneously found that Acierno was self-
employed during 1992 and 1993. Although there was some
evidence to the contrary, the District Court concluded that
substantial evidence supported the administrative law judge’s
factual finding. :
The District Court next considered whether the adminis-
trative law judge committed an error of law by refusing
to equitably toll the time limitation set forth at 42 U.S.C.
§ 405(c)(1)(B), (c)(4). For reasons apparent from the text,
structure, and history of the statutory scheme, the Dis-
trict Court concluded that applying equitable tolling to §
405(c)(1)(B), (c)(4) would frustrate the congressional intent
behind those provisions. Accordingly, the District Court
granted the Commissioner’s motion and entered judgment
in her favor.
A-7
Acierno timely appealed, and we appointed present counsel
to represent him. Before us, Acierno urges that he was a
wage earner in 1992 and 1993, and that even if the adminis-
trative law judge’s finding of self-employment stands,
equitable tolling applies to § 405(c)({1)(B), (c)(4).
DISCUSSION
“When deciding an appeal from a denial of disability
benefits, we focus on the administrative ruling rather than the
district court’s opinion.” Curry v. Apfel, 209 F.3d 117, 122
(2d Cir. 2000). “We review the administrative record de novo
to determine whether there is substantial evidence supporting
the Commissioner’s decision and whether the Commissioner
applied the correct legal standard.” Pollard v. Halter, 377
F.3d 183, 188 (2d Cir. 2004) (internal quotation marks
omitted); see also 42 U.S.C. § 405(g).
Before turning to the main issue presented here, we easily
conclude that substantial evidence supports the Commis-
sioner’s determination that Acierno was self-employed in
1992 and 1993. Acierno’s belated tax returns for those years
clearly categorize his income as “self-employment fees,” and
on at least two occasions Acierno set forth in his cortes-
pondence with the Social Security Administration that he
was self-employed in 1992 and 1993. These facts provide
ample support for the Commissioner’s finding that Acierno’s
1992 and 1993 income stems from his self employment,
notwithstanding Acierno’s contrary hearing testimony. See
Pollard, 377 F.3d at 188 (defining substantial evidence as
“such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion” (internal quotation
marks omitted)).
We thus confront the following state of affairs: although
Acierno claimed self-employment income in 1992 and 1993
sufficient to qualify him as “insured,” the Commissioner’s
records do not reflect that income because Acierno failed to
A-8
file his tax returns within the three-year, three-month and
15-day limitations period set forth at § 405(c)(1)(B), (c)(4).
Accordingly, there exists a conclusive presumption that
Acierno earned no income — and no quarters of coverage —
in 1992 and 1993, unless § 405(c)’s limitations period can be
equitably tolled.
In order to read an implied equitable tolling provision into
a statute that contains no such express provision, “[w]e must
determine ... whether equitable tolling is consistent with
Congress’ intent in enacting” the statutory scheme. Bowen v.
City of New York, 476 U.S. 467, 480 (1986). While we have
described the Social Security Act as “a remedial statute, to be
broadly construed and liberally applied,” Haberman v. Finch,
418 F.2d 664, 667 (2d Cir. 1969), other more specific con-
siderations lead us to conclude that § 405(c)(1)(B), (c)(4)
may not be equitably tolled.
Most important is the history of the provisions that
regulate the manner in which self-employed individuals
report their work and income figures to the Social Security
Administration. Before 1950, self-employed people were not
eligible for social security because Congress could not agree
on a reliable means of accurately determining their earnings
and, in turn, whether they were insured within the meaning
of the statute. Yoder, 650 F.2d at 1173. This was because,
unlike wage earners, a claim of earnings by a self-employed
person was not independently verifiable through the W-2
form submitted by an outside employer. Hollman v. Dep't of
Health and Human Servs., 696 F.2d 13, 17 (2d Cir. 1982);
see also Yoder, 650 F.2d at 1174 n.4.
Congress eventually decided to extend social security
benefits to the self-employed on the understanding that
self-employed people would report their work and earnings
history on a separate schedule as part of their income tax
retum. Yoder, 650 F.2d at 1173. But in order to “protect{ ]
A-9
the government from spurious or merely inaccurate and
unverifiable claims [of coverage] based on after-the-fact
evidence,” Congress substantially limited the manner in
which self-employed individuals could correct the infor-
mation that they provided to the government. Hollman, 696
F.2d at 17 (recognizing that “Congress saw fit to impose a
stricter standard for amendment of [the] records” of the self-
employed, and “acknowledg[ing] the validity of the policy
considerations inherent” in § 405(c)(4)(C)). This history illus-
trates that Congress, confronted with the specific problem of
ensuring that records of the self-employed were reasonably
accurate, sought to limit the extent to which those records
could_be altered and likely would not have intended for
equitable tolling to apply.
Moreover, in several ways, the text and structure of § 405
reflect Congress’s desire to limit the time and manner in
which a self-employed person may amend the Commis-
sioner’s records. First, once the period for amending the
Commissioner’s records has passed, the absence of any entry
in those records for a wage earner is only “presumptive”
evidence that he earned no wages. By contrast, the absence of
an entry for a self-employed person is “conclusive” evidence
that he earned no income. 42 U.S.C. § 405(c)(4)(B)-(C).
Second, Congress provided 10 exceptions to the limitations
period and indicated that these exceptions are exclusive
by setting forth that they consist “only” of the specifically
enumerated circumstances. None of those circumstances
requires a balancing of the equities; instead, they are
essentially technical in nature. See 42 U.S.C. § 405(c){5).
Third, Congress provided for one exception that might apply
here — allowing the Commissioner to amend his records
to conform to a later-filed tax return — but specifically
disallowed this possibility for the self-employed unless the
tax return was filed at some point within the limitations
period. 42 U.S.C. § 405(c)(5)(F). Given that the statute pro-
vides an exclusive list of exceptions and reiterates, in various
A-10
and specific forms, the limits imposed on amending records
of the self-employed, we believe it is inconsistent with an
open-ended implied tolling provision. See United States v.
Brockamp, 519 U.S. 347, 352 (1997) (holding that statute’s
“detail, its technical language, the iteration of the limitations
in both procedural and substantive forms, and the explicit
listing of exceptions, taken together, indicate” that equitable
tolling did not apply).
Moving beyond the history and language of the statute,
we find further support for our conclusion in the fact that
ascertaining whether an individual is “insured” within
the meaning of the Social Security Act is a determination
not “characterized by case-specific exceptions reflecting
individualized equities.” Brockamp, 519 U.S. at 352. Instead,
the administrative law judge’s role in this regard is rather
mechanical, involving primarily the counting of quarters of
coverage, which are determined by reference to how much an
individual eamed over a three-month period. Were we to
introduce into this function the need to consider an array
of equitable factors, we would effectively create a new and
burdensome level of administrative judgment that conflicts
with the agency’s technical role in determining insured
status. Taken together, the above considerations lead us to
conclude that implying an equitable tolling provision into
§ 405(c)(1)(B), (c)(4) would conflict with Congress’s intent
in enacting that provision.”
? We have discovered one district court case holding that equitable tolling
applies to § 405(c). See Smith v. Shalala, 910 F. Supp. 152 (D.N.J. 1995)
We respectfully disagree with Smith's reasoning and conclusion, largely
because the case fails to focus on § 465(c)’s history, text, and structure in
determining whether equitable tolling comports with Congress’s intent
in enacting that provision.
A-11
/
Acierno contends that because we previously found an
implied equitable tolling provision within 42 U.S.C. § 405(g)
and applied it in circumstances involving mental illness, see
Canales v. Sullivan, 936 F.2d 755, 759 (2d Cir. 1991), the
same result should follow here. We disagree. Section 405(g)
is significantly different from § 405(c)(1)(B), (c)(4). Section
405(g) allows an individual to seek judicial review of the
Commissioner’s decision within 60 days of the date that
notice of the decision is mailed to him. Section 405(g),
unlike § 405(c)(1)(B), (c)(4), specifically allows the Com-
missioner to toll the 60-day limitations period and to do so
indefinitely, which indicates Congress’s “clear intention
to allow tolling in some cases.” Bowen, 476 U.S. at 480.
Moreover, unlike § 405(c)(1)(B), (c)(4), the history of
§ 405(g) does not indicate that Congress, acting in response
to a specific concern, intended to severely limit the time
in which a claimant could seek judicial review. Finally, §
405(g) does not contain the exclusive language set forth
in § 405(c)(5). 42 U.S.C. § 405(c)(5) (setting forth that ex-
ceptions to limitations period exist, “but only” under certain
circumstances). Accordingly, our conclusion as to § 405(g)
does not control here.
As we have noted, the result in this case seems harsh to us:
a man whose mental illness prevents him from working,
and who in fact qualifies for disability coverage, nonetheless
receives no disability benefits because he filed his tax returns
too late — an error due in large part to his affliction.
However, today’s outcome is driven by factors that bind
us, namely, the history, text, and structure of § 405(c). The
decision whether to amend the statute to allow equitable
tolling in appropriate cases, such as this one, rests exclu-
sively with Congress.
A-12
CONCLUSION
For the reasons set forth above, we hold that equitable
tolling does not apply to the limitations period contained
in 42 U.S.C. § 405(c)(1)(B), (c)(4), and we AFFIRM the
judgment of the District Court.
A-13
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
xX FILED
VINCENT JAMES : IN CLERK’S OFFICE
ACIERNO, : U.S. DISTRICT COURT
Plaintiff, E.D.N.Y.
: AUG 08 2003
-against-
JOANNEB. | 02-CV-1374 (ARR)
BARNHART, : OPINION AND ORDER
COMMISSIONER OF
SOCIAL SECURITY,
Detendant. :
X
ROSS, United States District Judge:
Plaintiff Vincent J. Acierno applied to the Social Security
Administration (“SSA”) for disability insurance benefits on
April 10, 1998. His claim was denied initially and upon
reconsideration. A hearing was held before an Administrative
Law Judge (“ALJ”), and afterwards, on June 21, 1999, the
ALJ determined that plaintiff was not insured under the
Social Security Act (“the Act”). After the SSA Appeals
Council denied plaintiff's request for review, the ALJ’s
findings became the final decision of the Commissioner of
Social Security (“Commissioner”). Plaintiff then commenced
this action.
By motion dated September 23, 2002, the Commissioner
moves for judgment on the pleadings. In spite of a warning
that the case would be decided unopposed, plaintiff has not
filed any submissions in support of his claim. For the reasons
given below, the court grants the Commissioner’s motion. -
A-14
BACKGROUND
At the time of the ALJ’s determination, plaintiff was 34
years old and resided in Staten Island, New York, with his
wife and four children. Tr. 33-34. In his application for
disability insurance benefits, he stated that he became unable
to work on December 24, 1996, as a result of bipolar disorder,
manic depression, substance abuse and other afflictions. Tr.
65. Plaintiff consistently referred to December 24, 1996,
as his disability onset date, but he gave inconsistent job
histones in various statements to the Commissioner. In his
application for benefits, he claimed that he worked for
Metropolitan Life Insurance Company from 1995 until
December 24, 1996, and that he did not work between 1990
and 1993 or 1994. Tr. 66. However, in his disability report,
plaintiff stated that he owned a landscaping business between
1984 and 1991, and that he did cleaning work as a janitor
between 1991 and 1995. Tr. 101. At his hearing, plaintiff
testified that he didn’t know whether he had performed
landscaping work from 1984 to 1991, as indicated in his
disability report. Tr. 37. He also said that, contrary to the
_ statement on his application for benefits, he worked in 1992
and 1993 as a janitor. Tr. 39, 42. Plaintiff suggested that the
inconsistencies were attributable to the fact that he “didn’t
fill out that application ... [but] just signed it.” /d. In a
disability report, a Social Security field officer confirmed his
story, noting that plaintiff's wife filed his claim while plain-
tiff stayed in the car outside, too “paranoid” to come into the
office and “almost” unwilling to sign the applications. Tr. 96.
Plaintiff filed tax returns for years 1992 and 1993 on
December 4, 1997, and December 9, 1997, respectively. Tr.
68-77. He explained to the SSA that he had failed to file the
tax returns in a timely fashion because his psychological
illness prevented him from doing so. Tr. 43. On July 8, 1999,
the IRS accepted the late returns and agreed to plaintiff's
A-15
offer-in-compromise, which set forth a 12-month schedule in
which plaintiff would pay $2,800 for taxes owed from 1992
through 1997. Tr. 154.
As discussed below, a claimant qualifies for disability
benefits only if he worked for a certain amount of time prior
to the onset of his disability. The Commissioner has a work
history for each claimant, derived from W-2 forms submitted
by employers and from tax returns the claimant files with
the IRS. Within a certain limitations period, a claimant can
amend his work history as contained in the Commissioner’s
records by filing a late tax return. Plaintiff recognized that
if the Commissioner’s records were not amended to include
his alleged self-employment earnings from 1992 and 1993,
the Commissioner’s records would not reflect sufficient em-
ployment for him to qualify for benefits. Plaintiff conceded
that his late returns were filed after the limitations period
expired. Nevertheless, he argued that because he lacked the
mental capacity to file within the time limitation, fairness
dictated that his 1992 and 1993 earnings should be included
in the Commissioner’s records. To deny him credit for work
performed in those years, plaintiff contended, would penalize
him for the very disability that required him to seek benefits.
At his hearing, his counsel suggested that such a denial
“seems to be in contradiction to what Social Security is all
about.” Tr. 45.
Letters written by two of plaintiffs treating physicians
support his contention that mental problems prevented him
from filing his 1992 and 1993 tax returns within the limi-
tations period. Dr. David Wolf claimed that his treatment of
the plaintiff for testicular cancer, starting in 1990, produced
“significant psychiatric problems including depression,
anxiety and manic behavior,” and that “{a]t times, he finds it
difficult to attend to his own personal affairs owing to psy-
chiatric difficulties.” Tr. 141. Dr. Larry Kirstein, who started
treating the plaintiff in 1984, stated that, “[a]s a result of his
A-16
preoccupation with his fears and paranoia, he was unable to
consistently manage his affairs.” Tr. 152. Kirstein added that
after a “profound psychotic/manic episode” in August of
1993, plaintiff “remained unable to manage his affairs.” /d.
Mentioning but not discussing plaintiff's mental incapacity
argument, the ALJ determined that plaintiff's 1992 and 1993
income could not be included in the Commissioner’s record
because tax returns for those years were filed after the
§ 405(c)(1)(B) time limitation had elapsed. Tr. 25. He noted
that, according to the Commissioner’s records, plaintiff last
qualified for disability benefits in 1986. Jd. Therefore, the
ALJ reasoned, plaintiff was not insured within the meaning
of the Act due to his insufficient work history. /d.
In support of his application to the SSA Appeals Council,
plaintiff filed a letter from Dr. Joel Hoffman, another treating
psychiatrist. Dr. Hoffman opined that plaintiffs Cerebral
Metabolic Disorder, which was likely triggered by chemo-
therapy he received in the early 1990s, prevents him from
performing tasks such as “the complex filing of legally
required income tax returns.” Tr. 10. The Appeals Council
found no basis for overturning the ALJ’s decision. Tr. 5. This
appeal followed.
DISCUSSION
Plaintiff has not submitted any memoranda in support of
his claim, so his precise arguments are not known. The court
assumes that he advances the same argument he made before
the ALJ, that the limitations period within which a claimant
must amend the Commissioner’s employment records should
be tolled, and that the ALJ should amend the Commis-
sioner’s records in his case to reflect his self-employment
income from 1992 and 1993.
A-17
Standard of Review
This case comes to the court for review of the Commis-
sioner’s decision that the plaintiff did not acquire insured
status under the Social Security Act. The court’s role in
reviewing the decisions of the Social Security Administration
“is not whether the evidence preponderates in the Secretary’s
favor.” Dumas v. Schweiker, 712 F.2d 1545, 1553 (2d Cir.
1983). Rather, its task is narrowly confined to assessing
whether the Commissioner applied the correct legal standards
in making his determination and whether that determination
is supported by substantial evidence. See 42 U.S.C. §§
405(g), 1383(c); Johnson v. Bowen, 817 F.2d 983, 985 (2d
Cir. 1987); Donato v. Secretary, 721 F.2d 414, 418 (2d Cir.
1983).
Legal Background
A claimant has worked enough to qualify for benefits —
i.e. to be “insured’’ within the meaning of the Act — if he
has at least 20 quarters of coverage (“QC”’s) in the 40
quarter period preceding the onset of his disability. 42 U.S.C.
§ 423(c)(1)(B)\(i). A QC is defined as a period of three
calendar months ending on March 31, June 30, September
30, or December 31, during which time the claimant earned
$50 or more in wages or $100 or more in self-employment
income. 42 U.S.C. § 413(a). The Commissioner keeps an
earnings record for each individual from which the number
of QC’s is determined. See 42 U.S.C. § 423(c)(2)(A).
Within three years, three months and fifteen days follow-
ing the end of a year,’ 42 U.S.C. § 405(c)(1)(B), a claimant
may correct an entry for that year in the Commissioner’s
records. 42 U.S.C. § 405(c)(4). If, for instance, “any item of
' “The term ‘year’ means a calendar year when used with respect to
wages and a taxable year when used with respect to self-employment
income.” 42 U.S.C. § 405(c)(1)(A).
A-18
wages or self-employment income for such year has been
omitted from such records,” a claimant can submit a tax
return showing income for that year, which will be incor-
porated into the earnings record. 42 U.S.C. § 405(c)(4)(C).
An individual can thereby amend the Commissioner’s
records and establish the requisite QCs to qualify as an
insured under the Act.
With regard to wages, once the limitations period expires,
the absence of an entry in the earnings record as to wages for
a particular time period is “presumptive evidence ... that
no such alleged wages were paid to such individuals in
such period” which the claimant must rebut. 42 U.S.C. §
405(c)(4)(B) (emphasis added); see also Butts v. Sec’y of
Health and Human Svcs., 706 F.2d 107, 108 (2d Cir. 1983)
(requiring a claimant confronted with blank wage records
to prove his case by the preponderance of the evidence). With
regard to self-employment income, however, the absence of
an entry in the earnings record is
conclusive ... that no such alleged self-employment
income was derived by an individual in such year unless
it is shown that he filed a tax return of his self-
employment income for such year before the expiration
of the time limitation following such year.
42 US.C. § 405(c)(4¢éC) (emphasis added). The different
treatment between wages and self-employment income
reflects the different control wage earners and the self-
employed have over their employment records. Whereas
a wage camer should not be penalized if his employer
negligently failed to file a W-2 on his behalf, someone who
is self-employed can look out for his own interests. Indeed,
a self-employed individual has an ability to file fraudulent
records in the hopes of qualifying for benefits. See generally
A-19
Hollman v. Dep't. of Health and Human Servs., 696 F.2d 13,
17 (2d Cir. 1982), Shore v. Califano, 589 F.2d 1232, 1237
(3d Cir. 1978).
The Nature of Plaintiff's Alleged Employment in 1992
and 1993
Because absence of wages in an individual’s earnings
record may be rebutted after the expiration of the limitation
period, while absence of self-employment income generally
may not, the determination of whether an individual’s
earnings are wages or self-employment income is important.
If, for instance, plaintiff's earnings from 1992 and 1993 were
wages rather than self-employment earnings, plaintiff could
come forward with convincing evidence indicating that he
had received wages during those years to rebut the presump-
tive effect of the Commissioner’s records. If, however, his
income from those years was from self-employment, the
claimant would have to show that his case falls within one of
a limited number of exceptions to the limitation period.
Plaintiff initially argued that his earnings from 1992 and
1993 were wages. A memorandum of law filed on his behalf
before the ALJ stated that he had worked for an employer
who had never given hirn a W-2 form and who had failed
to report his earnings in a timely fashion during those years.
Tr. 144. However, in a letter to the Appeals Council dated
October 4, 1999, plaintiff stated that “during the years 1992
and 1993, the claimant was self-employed,” and that he “was
both employer and employee.” Tr. 17. Also, in his request for
a hearing before the ALJ, plaintiff wrote, “I feel my self-
employment earnings for 1992 and 1993 should be credited
to the earnings record.” Tr. 50. Finally, plainuff’s tax returns
for those years describe the 1992 and 1993 income as “‘self-
employment fees.” Tr. 68, 73. In light of this evidence, the
A-20
court finds that the ALJ correctly determined that the money
plaintiff earned in 1992 and 1993 was self-employment
income. Tr. 17.
Equitable Tolling
Plaintiff argues that his tardiness in filing the tax returns
for 1992 and 1993 resulted from his mental illness and
should be excused, thereby permitting him to correct the
Commissioner’s records. By so arguing, plaintiff effectively
asks the court to apply the doctrine of equitable tolling to
extend the limitations period contained in Section 405(c)(4).
Equitable tolling allows courts to “extend the statute of limi-
tations beyond the time of expiration as necessary to avoid
inequitable circumstances.” E.g., Johnson v. Nyack Hosp., 86
F.3d 8, 12 (2d Cir. 1996) (citing Bowers v. Transportacion
Maritima Mexicana, S.A., 901 F.2d 258, 264 (2d Cir. 1990)).
In general, a limitations period that is analogous to a statute
of limitations may be equitably tolled, whereas a limitations
period which stands as a jurisdictional prerequisite may not.
See Irwin v. Dept. of Veterans Affairs, 498 U.S. 89, 95
(1990). The Second Circuit has previously characterized the
limitations period at issue here as a statute of limitations.
Hollman, 696 F.2d at 17.
The Supreme Court has cautioned that equitable tolling
should be applied “only sparingly.” /rwin, 498 U.S. at 96.
Courts have permitted litigants to invoke the doctrine in the
following situations: (1) where the plaintiff was misled by his
adversary’s misconduct into allowing the deadline to pass;
(2) where the plaintiff has asserted his claim timely but in
the wrong forum; and (3) where extraordinary circumstances
beyond the plaintiff's control prevented him from exercising
his rights. Oshivier v. Levin, Fishbein, Sedran & Berman,
38 F.3d 1380, 1387 (3d Cir. 1994); see also John v. Kings
County Hospital Ctr., No. 98 Civ. 7846, 2000 U.S. Dist.
LEXIS 5179, at *9 (E.D.N-Y. Mar. 27, 2000). The Second
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Circuit has held that litigants beset by mental illness and
therefore incapable of heeding limitations periods can fall
into the third category. Canales v. Sullivan, 936 F.2d 755,
758 (2d Cir. 1991); see also Nunnally v. MacCausland, 996
F.2d 1, 6-7 (1" Cir. 1993). The dispositive issue, then, is
whether Section 405(c)(4), the particular limitation period at
issue in this case, permits equitable tolling for any reason.
The court has uncovered two instances when courts have
considered this precise question. In Hollman yv. Dep't of
Health and Human Servs., Judge Pollack in the Southern
District ruled that a plaintiff's mental incompetency could
not excuse his failure to amend the Commissioner’s employ-
ment records within the three-year, three-month, and fifteen-
day penod prescnbed by Section 405(c)(4). 501 F. Supp.
255, 259 (S.D.N.Y. 1980), rev'd on other grounds, 696 F.2d
13 (2d Cir. 1982). Observing that “the right to social security
benefits is a mght created by Congress,” Judge Pollack
reasoned that “the time limitation incorporated by Congress
must be strictly construed,” and that “[t]his court is not em-
powered to legislate where Congress has failed to do so.” 501
F. Supp. at 257, 258. He supported his decision by citing to a
Ninth Circuit case, in which the court ruled that Section
405(g) of the Act, which requires that a request for review of
an agency determination be filed within sixty days of the
agency’s final decision, could not be equitably tolled. See
Wimberley v. Finch, 446 F.2d 888 (9" Cir. 1971). Judge
Pollack’s decision pre-dates Canales, however, in which the
Second Circuit ruled that a claimant’s mental incapacity can
serve as a basis for tolling Section 405(g). Canales, 936 F.2d
at 756.
In Smith v. Shalala, the plaintiff claimed that she could not
amend the Commissioner’s records of her self-employment
income within Section 405(c)(4)’s time limitation due to her
abusive husband’s interference with her tax returns. 910
F. Supp. 152, 154 (D.N.J. 1995). Stating that “tolling in this
A-22
case best effects the purposes of the Act,” the district court in
New Jersey ruled that a claimant’s incapacity could toll
Section 405(c)(4)’s limitation period. /d. at 159-60. As a case
from outside the Second Circuit, however, Smith is of himited
precedential value. See Town of Moreau v. New York State
Dep't of Environmental Conservation, No. 96 Civ. 983, 1997
U.S. Dist. LEXIS 6519, at *26 (N.D.N.Y. May 5, 1997)
(finding that a District of New Jersey case is of limited prece-
dential value to a court sitting within the Second Circuit).
Without controlling authority on point, the court must
consider the issue posed by this case in broader terms to
determine whether the doctrine of equitable tolling and
Section 405(c)(4) are compatible. Generally speaking, the
doctrine of equitable tolling is read into every federal statute
of limitations. Holmberg v. Armbrecht, 327 U.S. 392, 397
(1946). Elaborating upon this general rule, the Second Circuit
held that this “policy is so strong that it is applicable unless
Congress expressly provides to the contrary in clear and
unambiguous language.” Atlantic City Elec. Co. v. General
Elec. Co., 312 F.2d 236, 241 (2d Cir. 1962). Although this
statement is several decades old, district courts in this circuit
have hewed to its strong endorsement of “implied equitable
tolling,” 1.e., reading equitable tolling into every federal
statute. See, e.g., Miele v. Pension Plan of N.Y. State Team-
sters Conf. Pension & Retirement Fund, 72 F. Supp. 2d 88,
103 (E.D.N.Y. 1999) (Raggi, D.J.); Pettola v. Nissan Motor
Acceptance Corp., 44 F. Supp. 2d 442, 448 (D. Conn. 1999);
Moll v. U.S. Life Title Ins. Co., 700 F. Supp. 1284, 1287-88
(S.D.N.Y. 1988).
Since 1962, when the Second Circuit announced its view of
implied equitable tolling, the Supreme Court has shied away
from a rule requiring a clear and unambiguous statement
from Congress and instead has emphasized Congressional
purpose and intent to determine whether Congress meant a
particular statute of limitations to be subject to the doctrine.
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In American Pipe & Construction Co. v. Utah, 414 U.S. 538
(1974), the Court concluded “that the mere fact that a federal
Statute providing for substantive liability also sets a time
limitation upon the institution of suit does not restrict the
power of the federal courts to hold that the statute of limi-
tations is tolled under certain circumstances not inconsistent
with the legislative purpose.” Jd. at 559. In Bowen v. New
York, 476 U.S. 467 (1986), the Court agreed that equitable
tolling could be read into a federal statute of limitations
“(when application of the doctrine is consistent with Con-
gress’ intent in enacting a particular statutory scheme... .”
Id. at 479. Following this Jead, the Ninth Circuit has ruled
that “[e]quitable tolling of the statute of limitations is a
defense to all federal statutes of limitations, even those
expressly contained within a given cause of action, unless
tolling would be inconsistent with the legislative purpose.”
Ellis v. San Diego, 176 F.3d 1183, 1189 (9" Cir. 1999). Other
circuits similarly emphasize the consistency of equitable
tolling with congressional intent in determining whether a
particular federal statute of limitations contains an implied
tolling provision. E.g., United States v. Clymore, 245 F.3d
1195, 1197 (10" Cir. 2001); Rashidi v. American President
Lines, 96 F.3d 124, 127 (5" Cir. 1996); Branch v. G. Bernd
& Co., 955 F.2d 1574, 1580 (11™ Cir. 1992).
In light of Bowen, American Pipe, and the several circuits
that have interpreted them, the implied equitable tolling rule
announced by the Second Circuit in Atlantic City some forty
years ago must be modified. Cf United States Football
League v. National Football League, 887 F.2d 408, 416 (2d
Cir. 1989) (upholding a district court’s decision not to follow
Second Circuit precedent in light of subsequent Supreme
Court jurisprudence). Thus, the court decides the issue in this
case by the following metric: a federal statute of limitations
is construed to include the doctrine of equitable tolling unless
Congress. expressly provides to the contrary in clear and
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unambiguous language, or unless doing so would conflict
with Congressional intent or the legislative purpose behind
the time period.
Nowhere in Section 405(c)(4) or its sequellae did Congress
expressly declare that equitable tolling would not apply.
Rather, in Section 405(c)(5), the Act permits the Commis-
sioner to “change or delete any entry with respect to wages or
self-employment income” “{a]fter the expiration of the time
limitation,” “but only” if the claimant’s case fits one of ten
limited exceptions. 42 U.S.C. § 405(c)(5)(A)-(J) (emphasis
added).’ Equitable tolling is not mentioned. The “but only”
term suggests that Congress intended the list of exceptions
to be exhaustive, although if Congress wished to exclude
equitable tolling expressly it could have done so.
Furthermore, by the maxim expressio unius est exclusio
alterius, there is an inference that a list of exceptions in a
statute “should be understood as exclusive.” 2A Norman J.
Singer, Statutes and Statutory Construction §47:23 (6" ed.
2000) [hereinafter “Singer”]; see also Pauley v. BethEnergy
Mines, 501 U.S. 680, 719 (1991) (Scalia, J., dissenting)
(“When a provision sets forth a general rule followed by
specific exceptions to that rule, one must assume — absent
other evidence -- that no further exceptions are intended.”’).
However, “[v]enerable as it is, expressio unius should be
applied wanly.” /NS v. Federal Labor Relations Authority, 4
F.3d 268, 272 (4"™ Cir. 1993); see also Bell v. Bell, 225 F.3d
203, 226 (2d Cir. 2000); Jn re Continental Casualty Co., 29
F.3d 292, 294 (7" Cir. 1994). As one court observed, “[t}he
problem with expressio unius is that it assumes that Congress
* Such exceptions include to correct errors apparent on the face of such
records, id. § 405(c)(5)(C), and to reduce the time reflected in an entry
which is erroneous as a result of fraud. /d. § 405 (c)(5)(E). Plaintiff does
not argue, and the court does not find, that any of these exceptions apply
to his case.
A-25
both considered every conceivable situation and intended
to address them all by addressing a few.” Federal Labor
Relations Authority, 4 F.3d at 272. Also, “(t]he rule is a rule
of statutory construction and not a rule of law. The maxim is
subordinate to the primary rule that the legislative intent
governs the interpretation of the statute.” 2A Singer § 47:23;
see also Herman & MacLean v. Huddleston, 459 U.S. 375,
387 n. 23 (1983) (refusing to rely on expressio unius and
noting that such canons “long have been subordinated to the
doctrine that courts will construe the details of an act in
conformity with its dominating general purpose’’).
Although Congress could have more clearly expressed its
desire to prohibit the application of equitable tolling to
Section 405(c)(4), an analysis of its intent and purpose in
enacting the limitation period strongly suggests that it in fact
did not intend equitable tolling to apply. “Generally, social
legislation should be liberally construed in favor of those
intended to benefit from it.” 3 Singer § 58:4. In finding that
Section 405(g) impliedly permitted equitable tolling, the
Supreme Court noted that Congress designed the Act “to be
‘unusually protective’ of claimants.” Bowen, 476 U.S. at 480,
quoting Heckler v. Day, 476 U.S. 104, 106 (1984). However,
as the Third Circuit stated in a case similar to the instant one,
“{a]lthough the purpose of the Act would lead us to construe
it in favor of a claimant when that is logically possible, there
are other legislative concerns meriting consideration.” Shore,
589 F.2d at 1236.
Prior to 1950, self-employed individuals were not included
in the Social Security system, as there was no agreed-upon
method to obtain reports of their income. /d. at 1237.
According to the then-Commissioner, developments in the
tax system for reporting income permitted the extension of
coverage to the self-employed. See Yoder v. Harris, 650 F.2d
1170, 1173 (10" Cir. 1981) (discussing the testimony of the
Commissioner before the House Committee on Ways and
A-26
Means in 1949). The Commissioner could compile work
records of the self-employed from their self-completed
tax returns. See id. However, with the reliability of late-filed
tax returns subject to no real rebuttal by the Commissioner,
the possibility that a claimant could try to defraud the
Commissioner with spurious after-the-fact claims of self-
employment income increased. Cf Shore, 589 F.2d at 1238;
see also Hollman, 696 F.2d at 17. Thus, upon amending the
Act, Congress adopted “stringent provisions on correction of
earnings records,” reflecting “fears that the [Commissioner]
would be confronted with claims based on eamings in
periods many years past for which there could be no effective
rebuttal.” Weisbraut v. Secretary, 757 F.2d 83, 85 (3d Cir.
1985). These “stringent provisions” include the time limi-
tation contained in Section 405(c)(4). Not to read Section
405(c)(4) strictly to preclude equitable tolling would be
inconsistent with this Congressional purpose.
Also, the structure of the statute itself indicates Congress’s
intention not to permit equitable tolling, even when a
claimant alleges mental incapacity as his reason for failing
to comply with the time limitation. In United States v.
Brockamp, the Supreme Court ruled that courts cannot
equitably toll due to mental disability the statutory time
period within which a taxpayer must file for a refund. 519
U.S. 347, 348 (1997). The statutory provision in question,
Section 6511 of the Internal Revenue Code, was silent with
regard to whether equitable tolling applied. See 26 U.S.C.
§ 6511 (1997). The Court reasoned that
Section 6511’s detail, its technical language, the iteration
of the limitations in both procedural and substantive
forms, and the explicit listing of exceptions, taken
together, indicate to us that Congress did not intend
courts to read other unmentioned, open-ended ‘equitable’
exceptions into the statute that it wrote. There are no
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counter-indications. Tax law, after all, is not normally
characterized by case-specific exceptions reflecting
individualized equities.
Brockamp, 519 U.S. at 352. Like Section 6511, Section
405(c)(4) is extremely detailed and written in technical
language, with the time limitation, like Section 6511, ex-
pressed “in unusually emphatic form.” /d. at 350. Also, as
discussed, Section 405(c)(4) also contains explicit, limited
exceptions to the particular time limitation enumerated.
Finally, the Court in Brockamp noted that the Internal
Revenue Service “processes more than 200 million tax
returns each year,” and that “[t]o read an ‘equitable tolling’
exception into § 6511 could create serious administrative
problems by forcing the IRS to respond to, and perhaps
litigate, large numbers of late claims, accompanied by
requests for ‘equitable tolling’... .” /d. at 352. It 1s true that
the SSA is capable of and indeed performs the sort of case-
by-case analyses of claims for benefits that the IRS cannot
undertake. It is also true that the SSA can adjudge claims
of disability that allegedly affected a claimant years before
he filed for benefits, even when the evidence of this past
disability consists of a retrospective diagnosis from a current
treating physician. Cf Rivera v. Sullivan, 923 F.2d 964, 968-
69 (2d Cir. 1991). However,
{t]he mandate to the [Commissioner] in 42 U.S.C. §
405(c)(2) to maintain ... records of self-employment
income was necessary for the determination in an
orderly manner of the innumerable requests for in-
surance benefits. Congress recognized that a beginning
and end of time for establishing eligibility was an
essential part of that need by prescnbing a ‘time
limitation’ within which changes and revisions in the
[Commissioner’s] records might be made. One need
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only be reasonable to foresee the disaster in [the SSA]
if there were not a reasonable time limitation for ending
disputes about eligibility benefits.
Shore, 589 F.2d at 1238 n. 18; see also Hollman, 501 F. Supp.
at 257-58 (noting that strict adherence to the time limitation
is “necessary for the determination in an orderly manner of
the innumerable requests for insurance benefits’). Intermin-
able disputes between the Commissioner and claimants who,
like plaintiff, allege that they were rendered incapable of
meeting statutory deadlines at times before the onset of their
disability, over the correctness of the Commissioner’s records
could create serious bureaucratic problems. These adminis-
trative difficulties, like the difficulties considered by the
Court in Brockamp, suggest that Congress intended that
Section 405(c)(4) be interpreted strictly.”
In ruling that the three-year, three-month, and fifteen-day
period cannot be tolled on account of a claimant’s mental
incapacity, the court recognizes that it draws a distinction
between Section 405(c)(4) and Section 405(g), which the
> A year after Brockamp, Congress added a new subséction to § 6511 —
§ 6511(h) — which created an exception to the time limitation for
“financially disabled” individuals. § 6511(h) mandates tolling of the
limitation period where an individual is “unable to manage his or her
financial affairs by reason of a medically determinable physical or mental
impairment that can be expected to result in death or to last for a
continuous period of not less than 12 months.” 26 U.S.C. § 651 1(h).
Congress has thus responded to the Court’s concerns in clear and
unambiguous language. It would be imprudent, however, to assume that
Congress intends that a// federal statutory time limitations include an
implicit equitable tolling provision based on this Congressional response
to Brockamp. The types of demands placed on the IRS by untimely-filed
refund claims differ significantly from those placed on the Commissioner
by claimants attempting to correct the Commissioner's records years after
they claimed to have performed the work at issue. If Congress wishes
equitable tolling to apply to Section 405(c)(4), it will have to indicate so
in spite of the statutory scheme it has created and in spite of the concerns
animating the scheme’s formation in 1950
A-29
Canales court found to permit equitable tolling. This dis-
tinction makes sense. Section 405(g) gives the Commissioner
discretion to extend the 60-day time limit for appeal, “thus
expressing [Congress’] clear intention to allow tolling in some
cases.” Bowen, 476 U.S. at 480. Moreover, courts determine
whether litigants have worthy bases for the equitable tolling
of filing deadlines in a myriad of cases and are thus well-
equipped to do so in the Social Security context. The court
also recognizes that its ruling conflicts with the result in
Smith. In part, the Smith court based its determination on the
facts of the particular case. Smith, 910 F. Supp. at 160.
Insofar as the Smith court’s holding resulted from an analysis
of the statute and relevant case law, the court respectfully
disagrees with its reasoning.
The purpose, structure, and intent of Congress in enacting
the limitations period in Section 405(c)(4) all strongly
suggest that the court should interpret it strictly to preclude
a construction that provides for equitable tolling. Although
“{ijt is unfortunate that plaintiff must go without the in-
surance benefits,” Shore, 589 F.2d at 1238 n. 18, the fact that
he did not attempt to correct the Commissioner’s records in a
timely fashion prevents him from further pressing his claim.
CONCLUSION
For the reasons stated above, defendant’s motion for judg-
ment on the pleadings is granted. The Clerk of the Court ts
instructed to enter judgment accordingly.
SO ORDERED. al Alves B. Rom
Allyne R. Ross
United States District Judge
Dated: August 7, 2002
Brooklyn, New York
A-30
SERVICE LIST:
Attorney for the Plaintiff
Vincent James Acierno
389 Rolling Hill Green
Staten Island, NY 10312
Attorney for the Defendant
John M. Kelley
United States Attorney’s Office
Eastern District of New York
1 Pierrepont Plaza, 14" Floor
Brooklyn, NY 11201
A-31
SOCIAL SECURITY ADMINISTRATION
Office of Hearings and Appeals
DECISION
IN THE CASE OF CLAIM FOR
Period of Disability and
Vincent J. Acierno Disability Insurance Benefits
(Claimant)
Foam 062-60-1839
(Wage Earner) (Social Security Number)
INTRODUCTION
This case is before the Administrative Law Judge on a
request for hearing. After due notice, a hearing was held on
June 21, 1999 in Staten Island, NY, at which the claimant
appeared and testified. The claimant was represented by
Phyllis R. Lederman, Esq.
ISSUES
The issue to be determined is whether the claimant has
acquired insured status under the Social Security Act which
depends upon whether the claimant has sufficient quarters of
coverage under the Act.
EVALUATION
On Apmil 10, 1998, the claimant filed an application for a
period of disability and disability insurance benefits, alleging
disability since December 24, 1996 due to depression, anxiety
and panic disorders. Following denial of the claim initially
and upon reconsideration, the claimant filed a timely request
for hearing.
A-32
After carefully considering the entire hearing record, and for
the reasons set forth below, it is my conclusion that the
claimant is not under a “disability” within the meaning of
the Social Security Act. Accordingly, his claim for benefits
under Title II of the Act is denied.
According to the requirements of the Social Security Act, in
order to establish entitlement to a period of disability and
disability insurance benefits under Title II of the Social
Security Act, an individual must be under a “disability” at a
time when he satisfies the disability insured status require-
ments of the Act.
APPLICABLE LAW & REGULATION
Section 223(a)(1) of the Social Secunty Act provides, as
pertinent here, for the payment of disability insurance benefits
for an individual who is insured for disability insurance
benefits (as determined under subsection [c][{1]), has not at-
tained retirement age, has filed an application for disability
insurance benefits and is under a disability.
Section 223(C)(1) of the Act provides, as pertinent here, that
an individual shall be insured for disability insurance benefits
in any month he is a fully insured individual and he had not
less than 20 quarters of coverage during the 40-quarter period
which ends with the quarter in which such month occurred,
or, if such month ends before the quarter in which he attains
age 31, not less than one-half (and not less than six) of the
quarters during the period ending with the quarter in which
such month occurred and beginning after he attained age 21
were quarters of coverage.
Section 213(a)(1) of the Social Security Act provides that
the term “quarter,” and the term “calendar quarter,” mean a
period of three calendar months ending March 31, June 30,
September 30 or December 31.
A-33
Section 213(a)(2) of the Act provides that for years prior
to 1978, a quarter of coverage is a quarter in which an
individual has been paid $50.00 or more in wages in employ-
ment covered by the Social Secunty Act or for which the
individual has been credited with $100.00 or more in self-
employment income (provided such self-employment income
was $400.00 or more).
Section 213(d) of the Social Security Act provides that the
amount of wages and self-employment income an individual
must have to be credited with a quarter of coverage is
$250.00 for 1978. The amounts for subsequent years, which
take into consideration the increases in average wages for all
workers, are: 1979 -- $260.00; 1980 -- $290.00; 1981 --
$310.00; 1982 -- $340.00; 1983 -- $370.00; 1984 -- $390.00;
1985 -- $410.00; 1986 -- $440.00; 1987 -- $460.00; 1988 --
$470.00; 1989 -- $500.00; 1990 -- $520.00; 1991 -- $540.00;
1992 -- $570.00; 1993 -- $590.00; 1994 -- $620.00 and 1995 --
$630.00.
To be considered for any year, self-employment income must
be $400.00 or more. No more than four quarters of coverage
may be credited to any calendar year.
Section 205(c) of the Social Security Act provides that
records of the earnings of all who work in employment or
self-employment covered under Social Security will be
maintained by the Social Security Administration. For Social
Secu.ity purposes, these records are evidence of an indi-
vidual’s earnings and the penods in which they were
received. An earnings record can be corrected at any time
up to three years, three month and 15 days after the year
in which wages were paid or self-employment income was
derived. After the time limit ends, if Social Security Ad-
ministration records show no entry of wages for an employer
for a particular period or no entry of self-employment income
for a year, these records are presumptive evidence that no
A-34
wages were paid by the employer in that period, and are
conclusive evidence that no self-employment income was
received in that year.
Section 205(c)(5) states specifically that no amount of self-
employment income of an individual for any taxable year, if
such return or statement was filed after the expiration of the
time limitation following the taxable year, shall be included
in Social Security’s records.
Under the provisions of Section 209 and 210 of the Social
Security Act, payment to an individual may not be considered
wages unless paid for work for performed in a bona-fide
employer/employee relationship under a valid contract of
employment. The designation of payments as wages or even
the reporting of these amounts as wages for Social Security
purposes does not in and of itself create such a relationship.
In all cases, it must be established that an employer/employee
relationship existed between the parties involved and that
actual payments were made for services rendered. In order
to do this, it is necessary to consider the acts of the parties
concerned, as well as their statements, in addition to other
extraneous factors of an alleged employment situation, in
order to distinguish between an employment relationship
within the meaning of the Social Security Act, as opposed to
a relationship which exists between parties who have close
family ties or are close friends.
Section 2i1({a) of the Social Security Act provides that
the term “net earnings from self-employment” means the
gross income, as computed under Chapter One of the Internal
Revenue code, derived by an individual from any trade or
business carried on by such individual, less the deductions
allowed under such chapter which are attributable to such
trade or business, plus his distributive share (whether or not
A-35
distributed) of the ordinary net income or loss, as computed
under Section 183 of such code, from any trade or business
carried on by a partnership or which he is a member.
In determining the existence of a trade or business, the
following facts must be considered:
a) Was the activity initiated and conducted in good
faith with the intention of n.aking a profit or pro-
ducing income?
b) Has the activity been regularly carried on, i.e., was
there a continuity of operations, a constant repe-
tition of transactions, or a regulanty of activity?
c) Did the individual have a regular occupation or
calling? The activity should be one that is being
carried on for the purpose of livelihood or profit.
d) Did the individual hold himself out to others as
being engaged in the selling of goods and/or
services?
At the hearing, the claimant testified he stopped working on
December 24, 1996. He was employed as an insurance agent
and he testified that he worked from August 1995-December
1996. Furthermore, the claimant testified that he received
disability insurance payments from Met Life at the rate of
$1800 per month. The claimant observed that the earnings
posted to his earnings record in 1997 represented payment
from his disability insurance policy. The claimant testified
that, previously, he was employed as a landscaper and
maintenance worker from 1992-1995. In 1991, the claimant
was receiving disability payments.
The income tax returns produced by the claimant included
Forms 1040, Schedule A, Schedule B, and Schedule SE for
the year 1993, dated December 9, 1997. For the year 1992,
Forms 1040, 2210, Schedule A, and Schedule SE, were dated
A-36
December 4 1997 (Exhibit 2D). (The tax returns that were
produced by the claimant were unsigned copies dated De-
cember 1997.)
According to the earnings record, the claimant did not meet
the disability insured status test. Specifically, 20 CFR
404.130 (a) addresses the requirements for determining dis-
ability insured status. The first rule states that the claimant
must meet the 20/40 requirement. The claimant would be
insured in a quarter for purposes of establishing a period of
disability, if in that quarter, he is fully insured and has at least
20 QC’s in the 40 quarter period ending with that quarter.
According to the claimant’s earnings record, he was last
insured for purposes of disability coverage on June 30, 1986.
Since the claimant filed his tax returns for the years 1992
and 1993, in 1997, he exceeded the time limit of 3 years,
3 months and 15 days. Consequently, Social Security cannot
correct their records to agree with the tax returns. The
claimant does not meet the disability insured status require-
ments without the inclusion of the 1992 and 1993 amended
_ earnings.
In conclusion, the claimant filed an application for disability
insurance benefits under Title II of the Act on April 10, 1998,
and alleged the onset of his disability on December 24, 1996.
The claimant’s earnings record reflects that the claimant was
last insured for disability insurance benefits on June 30, 1986
(Exhibit 4D).
The claimant argued that due to a mental impairment he
lacked the capacity to timely file tax returns for tax years
1992 and 1993 (unsigned copies of the claimant’s purported
tax returns are dated December 9, 1997, Exhibit 2D); more
than the time limit of 3 years, 3 months and 15 days (20 CFR
404.802). A review of these tax returns reflect total taxes
including self-employment tax of $15,172.00 for 1992 and
$13,992.00 for 1993; totaling $29,164.00.
A-37
At the hearing, the claimant testified that an Offer in Com-
promise was made by him to the Internal Revenue Service
for which acceptance was anticipated, imminently, to satisfy
his obligation for the past due taxes and same was submitted
subsequent to the close of the hearing (Exhibit 8F). Review
of these documents reflect that IRS accepted the claimant’s
offer of the sum of $2800.00 to be paid in 12 installments
beginning after acceptance of the said offer.
The Social Security Act (Finding 205(c)) and the Regulations
(20 CFR 404.801) provide for when the Commissioner may
change an individual’s record of self-employment income
alleged to have been derived by him after the expiration of
the time limitation. Review of the Act and the Regulations
faii to reflect any basis for change to the claimant’s earnings
record.
In conclusion, it is the decision of the Administrative Law
Judge that the claimant is not insured for Title Ii disability
insurance benefits and is not eligible for such benefits.
After carefully considering the entire hearing record, and for
the reasons set forth below, it is my conclusion that the
claimant is not under a “disability” within the meaning of
the Social Secunty Act. Accordingly, his claim for benefits
under Title II of the Act is denied.
FINDINGS
After careful consideration of the entire record, the Adminis-
trative Law Judge makes the following findings:
1. The claimant filed an application for Title II dis-
ability benefits on April 10, 1998.
2. The claimant allegec nis disability onset date is
December 24, 1996 (20 CFR 404.1574).
3. The claimant stopped working on December 24,
1996.
A-38
4. The claimant’s earnings record reflects that the
claimant was last insured for disability insurance
benefits on June 30, 1986.
5. It is the decision of the Administrative Law Judge
that the claimant is not insured for Title II dis-
ability insurance benefits and is not eligible for
such benefits.
6. The claimant is not under a “disability” within the
meaning of the Social Security Act. Accordingly,
his claim for benefits under Title II of the Act
is denied.
DECISION
It is the decision of the Administrative Law Judge that, based
on the application filed on April 10, 1998, the claimant is
not entitled to a period of disability or disability insurance
benefits under sections 216(i) and 223, respectively, of the
Social Secunty Act.
/s/ Peter F. Crispino
Peter F. Crispino
Administrative Law Judge
September 14, 1999
Date
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§ 405. Evidence, procedure, and certification for payments
(c) Wage records
(5) After the expiration of the time limitation following
any year in which wages were paid or alleged to have been
paid to, or self-employment income was derived or alleged to
have been derived by, an individual, the Commissioner of
Social Security may change or delete any entry with respect
to wages or self-employment income in the Commissioner’s
records of such year for such individual or include in the
Commissioner’s records of such year for such individual any
omitted item of wages or self-employment income but only --
(A) if an application for monthly benefits or for a lump-
sum death payment was filed within the time limitation
following such year; except that no such change, deletion, or
inclusion may be made pursuant to this subparagraph after
a final decision upon the application for monthly benefits
or lump-sum death payment;
(B) if within the time limitation following such year an
individual or his survivor makes a request for a change or
deletion, or for an inclusion of an omitted item, and alleges in
writing that the Commissioner’s records of the wages paid to,
or the self-employment income derived by, such individual in
such year are in one or more respects erroneous; except that
no such change, deletion, or inclusion may be made pursuant
to this subparagraph after a final decision upon such request.
Written notice of the Commissioner’s decision on any such
request shall be given to the individual who made the request;
(C) to correct errors apparent on the face of such
records;
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(D) to transfer items to records of the Railroad Retire-
ment Board if such items were credited under this subchapter
when they should have been credited under the Railroad
Retirement Act of 1937 or 1974 [45 U.S.C. 228a et seq., 231
et seq.], or to enter items transferred by the Railroad Retire-
ment Board which have been credited under the Railroad
Retirement Act of 1937 or 1974 when they, should have been
credited under this subchapter;
(E) to delete or reduce the amount of any entry which
is erroneous as a result of fraud;
(F) to conform the Commissioner’s records to --
(1) tax returns or portions thereof (including infor-
mation returns and other written statements) filed with the
Commissioner of Internal Revenue under title VIII of the
Social Security Act, under subchapter E of chapter ! or sub-
chapter A of chapter 9 of the Internal Revenue Code of 1939,
under chapter 2 or 21 of the Internal Revenue Code of 1954
or the Internal Revenue Code of 1986, or under regulations
made under authority of such title, subchapter, or chapter;
(11) wage reports filed by a State pursuant to an
agreement under section 418 of this title or regulations of the
Commissioner of Social Security thereunder; or
(111) assessments of amounts due under an agreement
pursuant to section 418 of this title (as in effect prior to
December 31, 1986), if such assessments are made within the
period specified in subsection (q) of such section (as so in
effect), or allowances of credits or refunds of overpayments
by a State under an agreement pursuant to such section;
except that no amount of self-employment income of an
individual for any taxable year (if such return or statement
was filed after the expiration of the time limitation following
the taxable year) shall be included in the Commissioner’s
records pursuant to this subparagraph;
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(G) to correct errors made in the allocation, to individuals
or periods, of wages or self-employment income entered in
the records of the Commissioner of Social Security;
(H) to include wages paid during any paree s in such year
to an individual by an employer;
(1) to enter items which constitute remuneration for em-
ployment under subsection (0) of this section, such entries to
be in accordance with certified reports of records made by
the Railroad Retirement Board pursuant to section 5(k)(3) of
the Railroad Retirement Act of 1937 [45 U.S.C. 228e(k)(3)]
or section 7(b)(7) of the Railroad Retirement Act of 1974 [45
U.S.C. 231f(b)(7)]; or
(J) to include self-employment income for any taxable
year, up to, but not in excess of, the amount of wages deleted
by the Commissioner of Social Secunty as payments
erroneously included in such records as wages paid to such
individual, if such income (or net earnings from self-
employment), not already included in such records as self-
employment income, is included in a return or statement
(referred to in subparagraph (F) of this subsection) filed
before the expiration of the time limitation following the
taxable year in which such deletion of wages is made.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.