Here's what the IRS is trying to accomplish with this procedure. While they probably believe it was proper for employers to be applying employment taxes during past periods, they recognize it would be unfair for those who complied with these rules to be worse off than those who did not. That's why they're permitting employers to seek refunds. For some employers, the dollar amount may be too small to make the refund procedure worthwhile. By giving the employer an election as to whether to apply this procedure retroactively, the IRS intends to protect the employer against a claim of wrongful withholding by an employee.
Employees can seek refunds.
If you're an employee, you should find out first if your employer is going to seek a refund of employment taxes for you. Things will go a lot more smoothly if the IRS deals with employers rather than individual employees. You'll have to provide all the details, including how much of your income from other sources was subject to social security tax, because that affects the amount of your refund. There will be no refund of income tax withholding. If the withholding took place in a year before 2000, you've already received credit for it on a previously filed tax return.