26 USC 3509 - Determination of employer’s liability for certain employment taxes

U.S Code last checked for updates: Nov 22, 2024

§ 3509.

Determination of employer’s liability for certain employment taxes

(a)

In general

If any employer fails to deduct and withhold any tax under chapter 24 or subchapter A of chapter 21 with respect to any employee by reason of treating such employee as not being an employee for purposes of such chapter or subchapter, the amount of the employer’s liability for—

(1)

Withholding taxes

(2)

Employee social security tax

(b)

Employer’s liability increased where employer disregards reporting requirements

(1)

In general

In the case of an employer who fails to meet the applicable requirements of section 6041(a), 6041A, or 6051 with respect to any employee, unless such failure is due to reasonable cause and not willful neglect, subsection (a) shall be applied with respect to such employee—

(A)

by substituting “3 percent” for “1.5 percent” in paragraph (1); and

(B)

by substituting “40 percent” for “20 percent” in paragraph (2).

(2)

Applicable requirements

(c)

Section not to apply in cases of intentional disregard

(d)

Special rules

For purposes of this section—

(1)

Determination of liability

If the amount of any liability for tax is determined under this section—

(A)

the employee’s liability for tax shall not be affected by the assessment or collection of the tax so determined,

(B)

the employer shall not be entitled to recover from the employee any tax so determined, and

(C)

section 3402(d) and section 6521 shall not apply.

(2)

Section not to apply where employer deducts wage but not social security taxes

This section shall not apply to any employer with respect to any wages if—

(A)

the employer deducted and withheld any amount of the tax imposed by chapter 24 on such wages, but

(B)

failed to deduct and withhold the amount of the tax imposed by subchapter A of chapter 21 with respect to such wages.

(3)

Section not to apply to certain statutory employees

(Added Pub. L. 97–248, title II, § 270(a), Sept. 3, 1982, 96 Stat. 553; amended Pub. L. 100–647, title II, § 2003(d), Nov. 10, 1988, 102 Stat. 3598; Pub. L. 101–508, title V, § 5130(a)(4), Nov. 5, 1990, 104 Stat. 1388–289; Pub. L. 115–141, div. U, title IV, § 401(a)(218), Mar. 23, 2018, 132 Stat. 1194.)

cite as: 26 USC 3509