A bill to amend chapter 21 of the Internal Revenue Code of 1954 and title II of the Social Security Act to provide that the payment of social security taxes by a nonprofit organization with respect to its employees shall constitute (for both tax and benefit purposes) a constructive filing by such organization of the certificate otherwise required to provide social security coverage for such employees if it has not received a refund or credit of such taxes, and to require the filing of such a certificate by any nonprofit organization which paid such taxes but received a refund or credit because it had not previously filed such certificate.
PL 94-563 (H.R.15571), enacted 10/19/1976

PUBLIC LAW 94-563—OCT. 19, 1976 
90 STAT. 2655 
Public Law 94-563 
94th Congress 
An Act 
To amend chapter 21 of the Internal Revenue Code of 1954 and title II of the 
Oct. 19, 19i6 
Social Security Act to provide that the payment of social security taxes by a 
[H.R. 15571] 
nonprofit organization with respect to its employees shall constitute (for both 
tax and benefit purposes) a constructive filing by such organization of the 
certificate otherwise required to provide social security coverage for such 
employees if it has not received a refund or credit of such taxes, and to require 
the filing of such a certificate by any nonprofit organization which paid such 
taxes but received a refund or credit because it had not previously filed such 
certificate. 
Be it enacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled, That (a) section 210 Social security 
(a) (8) (B) of the Social Security Act is amended— 
taxes. 
(1) by inserting after "filed pursuant to section 3121 (k) of the 42 USC 410. 
Internal Revenue Code of 1954" in the matter preceding clause (i) 
the following: " (or deemed to have been so filed under paragrapn 
(4) or (5) of such section 3121 ( k ^ "; 
(2) by inserting after "filed" in clauses (i), (ii), and (iii) the 
following: "(or deemed to have been filed)"; and 
(3) by striking out "is in effect" in the matter following clause 
(iii) and inserting in lieu thereof "is (or is deemed to be) in 
effect". 
(b) Section 3121(b)(8) of the Internal Revenue Code of 1954 26 USC 3121. 
(relating to exclusion of certain services from definition of employ-
ment) is amended— 
(1) by inserting after "filed pursuant to subsection (k) (or the 
corresponding subsection of prior law)" in the matter preceding 
clause (i) the following: "or deemed to have been so filed under 
paragraph (4) or (5) of such subsection"; 
(2) by inserting after "filed" in clauses (i), (ii), and (iii) the 
following:" (or deemed to have been filed)"; and 
(3) by striking out "is in effect" in the matter following clause 
(iii) and inserting in lieu thereof "is (or is deemed to be) in 
effect". 
(c) Section 3121 (k) of such Code (relating to exemption of 
religious, charitable, and certain other organizations) is amended by 
adding at the end thereof the following new paragraphs: 
"(4) 
CONSTRUCTIVE FILING OF CERTIFICATE WHERE NO REFUND 
OR CREDIT O F TAXES HAS BEEN MADE.— 
"(A) In any case where— 
"(i) an organization described in section 501(c) (3| 26 USC 501. 
which is exempt from income tax under section 601(a) 
has not filed a valid waiver certificate under paragraph 
(1) of this subsection (or under the corresponding pro-
vision of prior law) as of the date of the enactment of 
this paragraph or any subsequent date, but 
"(ii) the taxes imposed by sections 3101 and 3111 26 U
S
C 3101, 
have been paid with respect to the remuneration paid 3111-
by such organization to its employees, as though such a 
certificate had been filed, during any period (subject to 
subparagraph (B)(i)) of not less than three consecutive 
calendar quarters, 
90 STAT. 2656 
PUBLIC LAW 94-563—OCT. 19, 1976 
such organization shall be deemed (except as provided in 
subparagraph (B) of this paragraph) for purposes of sub-
Section (b) (8) (B) and section 210(a) (8) (B) of the Social 
42 use 410. 
Security Act, to have filed a valid waiver certificate under 
paragraph (1) of this subsection (or under the corresponding 
provision of prior law) on the first day of the period 
described in clause (ii) of this subparagraph effective on the 
first day of the calendar quarter in which such period began, 
and to have accompanied such certificate with a list contain-
ing the signature, address, and social security number (if 
any) of each employee with respect to whom the taxes 
described in such subparagraph were paid (and each such 
employee shall be deemed for such purposes to have con-
curred in the filing of the certificate). 
"(B) Subparagraph (A) shall not apply with respect to 
any organization if— 
"(i) the period referred to in clause (ii) of such sub-
paragraph (in the case of that organization) terminated 
before tlie end of the earliest calendar quarter falling 
wholly or partly within the time limitation (as defined 
42 use 405. 
in section 205(c)(1)(B) of the Social Security Act) 
immediately preceding the date of the enactment of this 
paragraph, or 
"(ii) a refund or credit of any part of the taxes which 
were paid as described in clause (ii) of such subpara-
graph with respect to remuneration for services per-
formed on or after the first day of the earliest calendar 
quarter falling wholly or partly within the time 
limitation (as defined in section 205(c)(1)(B) of the 
Social Security Act) immediately preceding the date of 
enactment of this paragraph (other than a refund or 
credit which would have been allowed if a valid waiver 
certificate filed under paragraph (1) had been in effect) 
has been obtained by the organization or its employees 
prior to September 9,1976. 
"(5) 
CONSTRUCTIVE FILING OF CERTIFICATE WHERE REFUND OR 
CREDIT HAS BEEN MADE AND NEW CERTIFICATE IS NOT FILED.—IN ANY 
case where— 
26 use 501. 
"(A) an organization described in section 501(c) (3) which 
is exempt from income tax under section 501(a) would be 
deemed under paragraph (4) of this subsection to have filed 
a valid waiver certificate under paragraph (1) if it were not 
excluded from such paragraph (4) (pursuant to subpara-
graph (B) (ii) thereof) because a refund or credit of all 
or a part of the taxes described in paragraph (4) (A) (ii) was 
obtained prior to September 9,1976; and 
"(B) such organization has not, prior to the expiration of 
180 days after the date of the enactment of this paragraph, 
filed a valid waiver certificate under paragraph (1) which is 
effective for a period beginning on or before the first day of 
the first calendar quarter with respect to which such reiund 
or credit was made (or, if later, with the first day of the 
earliest calendar quarter for which such certificate may be in 
effect under paragraph (1) (B) (iii)) and which is accom-
panied by the list described in paragraph (1) (A), 
PUBLIC LAW 94-563—OCT. 19, 1976 
90 STAT. 2657 
such organization shall be deemed, for purposes of subsection (b) 
(8)(B) and section 210(a)(8)(B) of the Social Security Act, 42USC410. 
to have filed a valid waiver certificate under paragraph (1) of 
this subsection on the 181st day after the date of the enactment of 
this paragraph, effective for the period beginning on the first day 
of the first calendar quarter with respect to which the refund or 
credit referred to in subparagraph (A) of this paragraph was 
made (or, if later, with the first day of the earliest calendar 
quarter falling wholly or partly within the time limitation (as 
defined in section 205(c)(1)(B) of the Social Security Act) 42 USC 405. 
immediately preceding the date of the enactment of this para-
graph) j and to have accompanied such certificate with a list 
containing the signature, address, and social security number (if 
any) of each employee described in subparagraph (A) of para-
graph (4) including any employee with respect to whom taxes 
were refunded or credited as described in subparagraph (A) of 
this paragraph (and each such employee shall be deemed for such 
purposes to have concurred in the filing of the certificate). A 
certificate which is deemed to have been filed by an organization 
on such 181st day shall supersede any certificate which may have 
been actually filed by such organization prior to that day except 
to the extent prescribed by the Secretary or his delegate. 
"(6) 
APPLICATION or CERTAIN PROVISIONS TO CASES or CONSTRUC-
TIVE FILING.—All of the provisions of this subsection (other than 
subparagraphs (B), (F),and (H) of paragraph (1)), including 
the provisions requiring payment of taxes under sections 3101 and 26 USC 3101. 
3111 with respect to the services involved, shall apply with respect 26 USC 3111. 
to any certificate which is deemed to have been filed by an organi-
zation on any day under paragraph (4) or (5), in the same way 
they would apply if the certificate had been actually filed on that 
day under paragraph (1); except that— 
"(A) the provisions relating to the filing of supplemental 
lists of concurring employees in the third sentence of para-
graph (1) (A), and in paragraph (1) (C), shall apply to the 
extent prescribed by the Secretary or his delegate; 
"(B) the provisions of paragraph (1) (E) shall not apply 
unless the taxes described in paragraph (4) (A) (ii) were 
paid by the organization as though a separate certificate had 
been filed with respect to one or both of the groups to which 
isuch provisions relate; and 
"(C) the action of the organization in obtaining the refund 
or credit described in paragraph (5) (A) shall not be con-
sidered a termination of such organization's coverage period 
for purposes of paragraph (3). Any organization which is 
deemed to have filed a waiver certificate under paragraph 
(4) or (5) shall be considered for purposes of section 3102(b) 26 USC 3102. 
to have been required to deduct the taxes imposed by section 
3101 with respect to the services involved. 
" ( 7 ) 
B O T H EMPLOYEE AND EMPLOYER TAXES PAYABLE B Y ORGANI-
ZATION FOR RETROACTIVE PERIOD IN CASES OF CONSTRUCTIVE FILING.— 
Notwithstanding any other provision of this chapter, in any case 
where an organization described in paragraph (5) (A) has not 
filed a valid waiver certificate under paragraph (1) prior to the 
expiration of 180 days after the date of the enactment of this 
paragraph and is accordingly deemed under paragraph (5) to 
have filed such a certificate on the 181st day after such date, the 
taxes due under section 3101, with respect to services constituting 
90 STAT. 2658 
PUBLIC LAW 94-563—OCT. 19, 1976 
26 use 3111. 
26 use 3101. 
26 use 3121 
note. 
Ante, p. 2655. 
26 use 3121 
note. 
Remuneration. 
26 use 3121 
note. 
employment by reason of such certificate for any period prior to 
the first day of the calendar quarter in which such 181st day 
occurs (along with the taxes due under section 3111 with respect to 
such services and the amount of any interest paid in connection 
with the refund or credit described in paragraph (5) (A)) shall 
be paid by such organization from its own funds and without any 
deduction from the wages of the individuals who performed such 
services; and those individuals shall have no liability for the 
payment of such taxes. 
"(8) 
EXTENDED PERIOD FOR PAYMENT OF TAXES FOR RETROACITVE 
COVERAGE.—Notwithstanding any other provision of this title, in 
any case where an organization described in paragraph (5) (A) 
files a valid waiver certificate under paragraph (1) by the end of 
the 180-day period following the date of the enactment of this 
paragraph as described in paragraph (5) (B), or (not having filed 
such a certificate within that period) is deemed under paragraph 
(5) to have filed such a certificate on the 181st day following that 
date, the taxes due under sections 3101 and 3111 with respect to 
services constituting employment by reason of such certificate for 
any period prior to the first day of the calendar quarter in which 
the date of such filing or constructive filing occurs may be paid in 
installments over an appropriate period of time, as determined 
under regulations prescribed by the Secretary or his delegate, 
rather than in a lump sum.", 
(d) The amendments made by this section shall apply with respect 
to services performed after 1950, to the extent covered by waiver cer-
tificates filed or deemed to have been filed under section 3121 (k) (4) 
or (5) of the Internal Revenue Code of 1954 (as added by such amend-
ments). 
SEC. 2. Notwithstanding any other provision of law, no refund or 
credit of any tax paid under section 3101 or 3111 of the Internal Reve-
nue Code of 1954 by an organization described in section 501(c) (3) of 
such Code which is exempt from income tax under section 501(a) of 
such Code shall be made on or after September 9, 1976, by reason of 
such organization's failure to file a waiver certificate under flection 
3121 (k)(l) of such Code (or the corresponding provision of prior 
law), if such organization is deemed to have filed such a certificate 
under section 3121 (k) (4) of such Code (as added by the first section 
of this Act). 
SEC. 3. In any case where— 
(1) an individual performed service, as an employee of an orga-
nization which is deemed under section 3121 (k) (5) of the Inter-
nal Revenue Code of 1954 to have filed a waiver certificate under 
section 3121 (k) (1) of such Code, at any time prior to the period 
for which such certificate is effective; 
(2) the taxes imposed by sections 3101 and 3111 of such Code 
were paid with respect to remuneration paid for such service, but 
such service (or any part thereof) does not constitute employ-
ment (as defined in section 210(a) of the Social Security Act and 
section 3121(b) of such Code) because the applicable taxes so 
paid were refunded or credited (otherwise than through a refund 
or credit which would have been allowed if a valid waiver certifi-
cnte filed under section 3121 (kHl) of such Code had been in 
effect) prior to September 9, 1976; and 
PUBLIC LAW 94-563—OCT. 19, 1976 
90 STAT. 2659 
(3) any portion of such service (with respect to which taxes 
were paid and refunded or credited as described in paragraph 
(2)) would constitute employment (as so defined) if the organi-
zation had actually filed under section 3121 (k) (1) of such Code a 26 USC 3121. 
valid 
waiver 
certificate 
effective 
as provided in section 
3121 (k) (5) (B) thereof (with such individual's signature appear- Ante, p. 2655. 
ing on the accompanying list), 
the remuneration paid for the portion of such service described in 
paragraph (3) shall, upon the request of such individual (filed in such 
manner and form, and with such official, as may be prescribed by reg-
ulations made under title II of the Social Security Act) accompanied 42 USC 401. 
by full repayment of the taxes which were paid under section 3101 of 
such Code with respect to such remuneration and so refunded or cred- 26 USC 3101. 
ited, be deemed to constitute remuneration for employment as so 
defined. In any case where remuneration paid by an organization to 
fin individual is deemed under the preceding sentence to constitute 
remuneration for employment, such organization shall be liable (not-
withstanding any other provision of such Code) for repayment of any 
taxes which it paid under section 3111 of such Code with respect to 26 USC 3111. 
such remuneration and which were refunded or credited to it. 
Approved October 19, 1976. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 94-1711 (Comm. on Ways and Means). 
CONGRESSIONAL RECORD, Vol. 122 (1976): 
Sept. 30, considered and passed House. 
Oct. 1, considered and passed Senate.