Publication 3953: 

Questions and Answers 

About Tax Court and the Notice of 

Employment Tax Determination

Under IRC § 7436

Contents

1. What is a Notice of Employment Tax Determination 

Under IRC § 7436? ......................................................2

2. When does the Internal Revenue Service issue a 

Notice of Employment Tax Determination Under 

IRC § 7436?................................................................ 2

3. Can these determinations be reviewed? ...................... 2

4. When is the deadline for filing a Tax Court petition? ..... 2

5. How do you file a petition in Tax Court?....................... 3

6. Who may represent you in the Tax Court? ................... 3

7. Is an election to use the Tax Court’s simplified “small 

case procedures” available? ........................................ 3

8. What happens if you decide not to file a Tax Court 

petition? ...................................................................... 3

9. What is your liability for interest?.................................. 3

10. What effect do bankruptcy proceedings have in the 

Tax Court?................................................................... 3

11. How do you contact a Taxpayer Advocate?................. 4

Publication 3953 (Rev. 10-2017) Catalog Number 33273Z Department of the Treasury Internal Revenue Service www.irs.gov
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Introduction

In this publication, the Internal Revenue Service (“Service”) 

provides you with general information that may be helpful 

when you receive a Notice of Employment Tax Determination 

Under IRC § 7436. If you wish to discuss your particular 

situation with someone at the Service, call the person whose 

name and telephone number appear on the first page of the 

Notice of Employment Tax Determination Under IRC § 7436. 

You can get information about all aspects of the Tax Court’s 

proceedings on the Tax Court’s website at www.ustaxcourt.

gov or by writing to the Tax Court at

 United States Tax Court

 400 Second Street, NW

 Washington, DC 20217

Please note that contacting either the Service or the Tax 

Court does not extend the deadline by which you must file 

a Tax Court petition (if you choose to file one). (For more 

information on this, see Question 4 “When is the deadline for 

filing a Tax Court petition?”.)

1. What is a Notice of Employment Tax Determination 

Under IRC § 7436?

The Notice of Employment Tax Determination Under IRC § 

7436 (“Notice of Employment Tax Determination”) is your legal 

notice that you may begin a proceeding in the United States 

Tax Court. The Notice of Employment Tax Determination 

notifies you of your right to go to Tax Court, but you may 

choose not to do so. (See question 8, “What happens if you 

decide not to file a Tax Court petition?”)

“Employment tax” includes tax imposed under the Federal 

Insurance Contributions Act (FICA) (both the Old Age, 

Survivors, Disability Insurance (OASDI) portion of FICA and 

the Hospital Insurance (HI) portion of FICA, commonly called 

the “social security” and the “Medicare” portions of FICA), 

the Federal Unemployment Tax Act (FUTA), the Railroad 

Retirement Tax Act (RRTA), and/or federal income tax 

withholding (FITW).

The date on which the Notice of Employment Tax 

Determination is mailed by certified or registered mail begins 

the time period during which you may file a petition in Tax 

Court asking that court to redetermine some or all of the 

Service’s determinations set forth in the Notice of Employment 

Tax Determination.

2. When does the Service issue a Notice of 

Employment Tax Determination?

The Service issues a Notice of Employment Tax Determination 

after making one or more of the following determinations.

EMPLOYMENT STATUS. The Service has determined that 

one or more individuals who provide services to you should 

be legally classified as your employees.

NO RELIEF UNDER SECTION 530. The Service has 

determined that you do not satisfy the statutory requirements 

to qualify for relief under section 530(a) of the Revenue Act of 

1978 (section 530).

THE RELIEF DESCRIBED IN SECTION 530 IS NOT 

APPLICABLE. The service has determined that the relief 

described in section 530 is not applicable.

AMOUNT OF EMPLOYMENT TAX. Based on one or more 

of these determinations, the Service has determined the 

amount of additional employment tax, additions to tax, and 

penalties.

3. Can these determinations be reviewed? 

If the Service mailed you a Notice of Employment Tax 

Determination, you may, within a period of time established 

by law, begin a proceeding for review of the Service’s 

determinations by filing a petition in the United States Tax 

Court. In that proceeding, you ask the Tax Court to make an 

independent determination whether the Service was correct 

when it made the determinations set forth in the Notice of 

Employment Tax Determination. In making its decision, the 

Tax Court takes a fresh look at the issues. You must produce 

evidence for the court to consider, even if you previously 

provided it to the Service during the audit.

4. When is the deadline for filing a Tax Court 

petition? 

If the Service sent you a Notice of Employment Tax 

Determination by certified or registered mail, the time you 

have to file a petition with the Tax Court is set by law and 

cannot be extended or suspended. Thus, contacting the 

Service or the Tax Court for more information, or receiving 

other correspondence from the Service, will not change the 

period for filing a petition with the Tax Court.

Generally, you must file the petition with the Tax Court before 

the 91st day after the date the Notice of Employment Tax 

Determination was mailed by certified or registered mail. For 

special rules governing how a bankruptcy proceeding affects 

the deadline, see question 10, “What effect do bankruptcy 

proceedings have in the Tax Court?”

The petition will be considered timely filed if it is filed by the 

date indicated on the first page of the Notice of Employment 

Tax Determination under the heading, “Last Date to 

Petition Tax Court.” The petition is considered timely filed if 

the postmark date (either by the U.S. Postal Service or a 

designated private delivery service) falls within the period 

described above for filing a petition.
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5. How do you file a Tax Court petition?

You can get information about filing a petition with the Tax 

Court and other Tax Court procedures on the Tax Court’s 

website at www.ustaxcourt.gov or by writing to the Tax 

Court at

 United States Tax Court

 400 Second Street, NW

 Washington, DC 20217

You should act promptly if you intend to file a petition with 

the Tax Court.

If you file a petition with the Tax Court related to the Notice of 

Employment Tax Determination and you use the form petition 

on the Tax Court website, check the box for “Determination 

of Worker Classification” on page 1 of the petition.

Timely send the completed petition, a copy of the Notice of 

Employment Tax Determination, and a copy of all statements 

and/or schedules you received with the Notice of Employment 

Tax Determination (but not this publication) to the Tax Court 

at the above address.

6. Who may represent you in the Tax Court?

You may be represented by anyone admitted to practice 

before the Tax Court. In addition, if you are an individual, 

you may represent yourself before the Tax Court. If you are 

a corporation or unincorporated association, you may be 

represented by an authorized officer of the corporation or 

by an authorized member of the association. If you are an 

estate or trust, you may be represented by your fiduciary. 

More information on who is admitted to practice before the 

Tax Court and other Tax Court procedures can be found on 

the Tax Court’s website at www.ustaxcourt.gov.

7. Is an election to use the Tax Court’s simplified 

“small case procedures” available?

Yes. The Tax Court has simplified “small case procedures”. 

You may elect those simplified procedures when the amount 

in dispute (including tax, additions to tax, and penalties) is 

$50,000 or less for each calendar quarter involved. The 

Service also has the right to oppose the election.

You can get more information about the simplified procedures 

and how that election affects your appeal rights on the Tax 

Court’s website at www.ustaxcourt.gov, or by writing to the 

Tax Court at:

 United States Tax Court

 400 Second Street, NW

 Washington, DC 20217

8. What happens if you decide not to file a Tax Court 

petition?

If you decide not to file a petition with the Tax Court, you can 

sign the waiver form (Form 2504-T enclosed with the Notice 

of Employment Tax Determination) to limit the accumulation 

of interest. Return it to the Service at the IRS address on 

the top of the first page of the Notice of Employment Tax 

Determination. By signing Form 2504-T, you are agreeing 

to the proposed assessment. This will permit the Service to 

assess the proposed assessment quickly and can help limit 

the accumulation of interest.

If you decide not to sign and return the waiver, and you do not 

file a petition with the Tax Court within the time limit, the law 

requires the Service to assess the proposed employment tax, 

additions to tax, and/or penalties, plus the interest required 

by law, and bill you for the assessment after 90 days from the 

date of the Notice of Employment Tax Determination.

If you do not file a Tax Court petition within the allotted time, 

you still may seek judicial review of the Service’s employment 

tax determinations by filing a refund suit in United States 

District Court or in the Court of Federal Claims. Please note 

that before a refund suit can be filed, you must pay to the 

IRS the amount of employment tax that relates to one worker 

for one tax period and file a claim for refund with the IRS. If 

the claim for refund is denied (or the IRS does not respond 

to the refund claim for six months), you may file a refund 

suit in United States District Court or the United States 

Court of Federal Claims and challenge the employment tax 

assessment. For more information about the refund process, 

see Pub 5146, Employment Tax Returns: Examinations and 

Appeal Rights

9. What is your liability for interest?

By law, interest accrues on any underpayment of tax that is 

not timely paid. Interest accrues on the underpayment of tax, 

additions to tax, penalties, and accrued interest.

If you are a C-corporation and you have an underpayment 

of $10,000 or more, section 6621(c) of the Internal Revenue 

Code requires that the Service charge you an interest rate 

two percent higher than the normal rate.

10. What effect do bankruptcy proceedings have in 

the Tax Court? 

BANKRUPTCY PROCEEDINGS BEGUN BEFORE A NOTICE 

OF EMPLOYMENT TAX DETERMINATION IS MAILED. If you 

are in bankruptcy and the automatic stay under Bankruptcy 

Code section 362(a) is in effect as of the date of the Notice 

of Employment Tax Determination, you are prohibited from 

filing a petition with the Tax Court while the automatic stay 

is in effect. If you nevertheless file a Tax Court petition while 

the automatic stay is in effect, the Tax Court petition will be 

completely void. You may ask the Bankruptcy Court to lift 
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the stay so you can file a petition with the Tax Court, or, once 

the automatic stay is no longer in effect by operation of law, 

you may then file a Tax Court petition. Once the automatic 

stay is lifted by the Bankruptcy Court or terminated by 

operation of law, you must calculate the deadline for filing 

the Tax Court petition as follows: the petition must be filed 

before the 151st day after the date the automatic stay is 

terminated. We suggest that you file your Tax Court petition 

as soon as possible after the Bankruptcy Court lifts the 

automatic stay or the automatic stay is no longer in effect 

by operation of law.

BANKRUPTCY PROCEEDINGS BEGUN AFTER A NOTICE 

OF EMPLOYMENT TAX DETERMINATION IS MAILED 

BUT BEFORE TAX COURT PETITION IS FILED. If you 

file a bankruptcy petition after the date of the Notice of 

Employment Tax Determination but before filing a Tax Court 

petition, you are precluded from filing a Tax Court petition 

while the automatic stay under Bankruptcy Code section 

362(a) is in place. If you nevertheless file a Tax Court petition 

while the automatic stay is in effect, the Tax Court petition 

will be completely void. Once the automatic stay is lifted 

by the Bankruptcy Court or terminated by operation of 

law, you must calculate the deadline for filing a Tax Court 

petition as follows:

the period for filing a Tax Court petition (before 

the 151st day) after the date the automatic stay is 

terminated

is reduced by

the number of days between the date of the Notice 

of Employment Tax Determination and the date the 

bankruptcy petition was filed.

Example. The Notice of Employment Tax Determination 

is sent to you by certified mail on May 1, 2017. You file a 

bankruptcy petition in the Bankruptcy Court on June 1, 2017. 

You ask the Bankruptcy Court to lift the automatic stay. On 

June 18, 2017, the Bankruptcy Court lifts the automatic stay 

so that you can file a petition. When would be the last day by 

which you could timely file your Tax Court petition?

First, you must calculate the 151st day after the date the 

automatic stay is lifted. The 151st day after June 18, 2017, 

is November 16, 2017.

Then, from that date, you must reduce the number of days 

that elapsed from the date of the Notice of Employment Tax 

Determination to the date you filed your bankruptcy petition. 

Thirty-one days elapsed between May 1, 2017 and June 

1, 2017. Thus, the deadline for filing the Tax Court petition 

would be thirty-one days before November 16, 2017. That 

date would be October 16, 2017. So, the Tax Court petition 

would have to be filed before October 16, 2017, which 

means that the petition must be filed no later than October 

15, 2017.

We suggest that you file your Tax Court petition as soon as 

possible after the Bankruptcy Court lifts the automatic stay or 

the automatic stay is no longer in effect by operation of law.

11. How do you contact a Taxpayer Advocate? 

If you have questions/concerns about the Notice of 

Employment Tax Determination, first contact the person 

whose name and telephone number appear at the top of the 

first page of the Notice of Employment Tax Determination. 

This person can directly access your tax information and 

help you get answers.

Do you want assistance by a Taxpayer Advocate? This 

assistance is not a substitute for established IRS procedures, 

formal Appeals processes, or filing a petition with the Tax 

Court. The Taxpayer Advocate cannot reverse legal or 

technically correct tax determinations, nor extend the time 

allowed by law to file a petition in the United States Tax 

Court. However, the Taxpayer Advocate can give your tax 

matter proper and prompt handling when unresolved through 

normal channels. You can call toll-free 1-877-777-4778 and 

ask for Taxpayer Advocate assistance, or visit https://www.

irs.gov/advocate/local-taxpayer-advocate/contact-yourlocal-taxpayer-advocate for the telephone number of the 

Taxpayer Advocate for the IRS office that issued the Notice 

of Employment Tax Determination .