SSR 65-33c: Rescinded

Rescinded September 14, 2018 by FR Vol. 83, No. 179, page 46771

20 CFR 404.975, 404.976, 404.977, and 404.977a

SSR 65-33c

UNITED STATES OF AMERICA v. LEWIS and HICKS, 235 F. Supp. 220

(1964)

Whether the services performed in the preparation of a self-employment

tax return are services performed in connection with a claim before the

Secretary for which the charging of a fee would be subject to regulation

by the Secretary under section 206 of the Act, depends upon whether the

real purpose of determining the self-employment income is to knowingly

further a claim then made or to be made before the Social Security

Administration.

WILSON, District Judge:

* * * * * *

An issue of law that merits careful consideration is raised upon behalf

of the defendant Lewis with respect to her conviction upon Counts 3 thru

6. The defendant is charged in these counts with charging fees in excess

of that permitted by law for services to social security applicants in

connection with the claim for social security benefits. The defendant

contends that such charges as were made by her were for work performed in

the preparation of the subject's income or self-employment tax returns and

not for any representation before the Social Security Administration. The

defendant further contends that the law does not purport to authorize the

Social Security Administration to regulate fees with respect to services

performed in the filing of tax returns, including self-employment tax

returns, and that charges for such tax services could not constitute a

criminal offense.

urns and

not for any representation before the Social Security Administration. The

defendant further contends that the law does not purport to authorize the

Social Security Administration to regulate fees with respect to services

performed in the filing of tax returns, including self-employment tax

returns, and that charges for such tax services could not constitute a

criminal offense.

The difficulty with the defendant's contentions in this respect is

twofold. In the first place, a dispute of fact exists under the record in

this case whether the fees charged were solely for services in regard to

tax work, as testified by the defendant, or whether in fact the fees

charged were at least in part for services rendered the social security

applicant in other respects in the presentation and processing of his

claim before the Social Security Administration. In the second place, it

cannot be held as a matter of law that charges for services performed in

regard to preparation of self-employment tax returns could not under any

circumstances constitute a violation of the law regulating fees charged

for services performed in connection with any claim before the Social

Security Administration.

The statute here involved, 42 U.S.C. § 406, provides in relevant part:

"* * * The Secretary may, by rule and regulation, prescribe the maximum fees which may be charged for services performed in connection with any

claim before the Secretary under this subchapter, and any agreement in

violation of such rules and regulations shall be void. Any person who

shall * * * knowingly charge or collect directly or indirectly any fee in

excess of the maximum fee, or make any agreement directly or indirectly to

charge or collect any fee in excess of the maximum fee, prescribed by the Secretary shall be deemed guilty of a misdemeanor * * *".

The regulation governing fees adopted in accordance with the above

statute, to the extent that the same is relevant to the present

discussion, is as follows:

y or indirectly any fee in

excess of the maximum fee, or make any agreement directly or indirectly to

charge or collect any fee in excess of the maximum fee, prescribed by the Secretary shall be deemed guilty of a misdemeanor * * *".

The regulation governing fees adopted in accordance with the above

statute, to the extent that the same is relevant to the present

discussion, is as follows:

"The fee that an attorney or other person may charge the claimant for

representing him in matters before the social security administration must

be approved by the social security administration in all cases except

(exceptions not applicable). * * * "

In light of the issue now before the Court, it is apparent that the

significant language in the above statute is the phrase "service performed

in connection with any claim before the Secretary". The word "services"

does not necessarily exclude tax services. Neither does it necessarily

include tax services. Rather, such inclusion or exclusion must depend upon

the facts of the particular case. Whether a fee charged for preparation of

the self-employment tax return would or would not be subject to regulation

would depend upon whether, under the facts of the particular case, such

service might properly be considered a "service performed in connection

with any claim before the Secretary". If the real purpose of determining

self-employment income was to knowingly further a claim then made or to be

made before the Social Security Administration, such would constitute a

"service" the fee for which may be regulated. On the other hand, if there

was no evidence that the real purpose of the service performed in the

determination of the self-employment income was knowingly performed in

furtherance of a claim then made or to be made before the Social Security

Administration, such work would not constitute a service the fee for which

was subject to regulation.

"service" the fee for which may be regulated. On the other hand, if there

was no evidence that the real purpose of the service performed in the

determination of the self-employment income was knowingly performed in

furtherance of a claim then made or to be made before the Social Security

Administration, such work would not constitute a service the fee for which

was subject to regulation.

Under the record in this case there was evidence from which a jury could

conclude on each count that the tax work performed by the defendant Lewis

was in fact a service knowingly performed in connection with a claim

before the Social Security Administration. In each instance there was

evidence that (a) the applicant initially came to or was referred to the

defendant for assistance in making a social security claim, (b)

application was made for social security benefits immediately before or

after the tax work was performed, (c) the tax returns filed were

delinquent returns and reflected only delinquent self-employment tax which

would have the effect of establishing social security eligibility, and (d)

even though the defendant contended no charge was made for additional

services, but only for the tax work, in most instances the defendant

performed additional services in connection with the claim before the

Social Security Administration. The Court is therefore of the opinion that

under the record in this case a jury issue existed under Counts 3, 4, 5,

and 6 as to whether the fee charged by the defendant was one subject to

regulation under 42 U.S.C. � 406.

Having fully considered the defendants' motions for new trial, the Court

is of the opinion that the motions should be overruled as to each count

thereof.

An order will enter accordingly.