Mr. Stroh was self-employed in the home construction business. He did not report his self-employment income on his tax returns from 1946 through 1957.

In 1958 the IRS conducted an audit of his taxes for the years 1953, 1954, and 1955.

Mr. Stroh made an agreement with IRS to extend the statute of limitations for those years until 1960. He then paid off his deficiency tax liability on March 29th, 1959.

On September 22, 1959 Mr. Stroh applied for a social security retirement annuity. He needed those delinquent years’ self-employment income in order to have enough quarters of coverage to qualify.

Mr. Stroh argued that because the agreement with the IRS extended the time limitation for taxes, the Social Security Administration should also extend the time limit for reporting his self-employment income.

However, it was determined that Mr. Stroh’s agreement with IRS did not extend the time limitation for reporting social security income. This time limitation was 3 years 3 months and 15 days after the close of the taxable year in question.
Simply put, Social Security was not bound by Mr. Stroh’s agreement with the IRS, which was a separate matter.

Thus, only Mr. Stroh’s income from 1955 counted as quarters of coverage for social security purposes.

See Social Security Ruling (SSR) 65-42c.

This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.