Court Opinion

ID: 9473651
Source: CourtListenerOpinion
Date Created: 2023-08-05 04:35:25.575948+00
Date Added: 2024-06-11T17:43:39.183588
License: Public Domain

FAGG, Circuit Judge,
dissenting.
I respectfully dissent. In my view, the Secretary properly invoked the conclusive presumption of section 405(c)(4)(C) whether we allow equitable considerations such as those involved in Grigg v. Finch, 418 F.2d 661, 664 (6th Cir.1969), to substitute for a tax return or not. Even considering all the documentary evidence on file with the Secretary, I conclude that Hendrickson has failed to establish his entitlement to any quarters of coverage for 1967 or 1968. The Secretary’s determination of coverage depends on Hendrickson’s net self-employment income. 42 U.S.C. § 411(b). I dis*753agree with the court’s rationale for concluding that Hendrickson had no business expenses in 1967 and 1968 and that his net income thus equals the gross figures shown on the form 1099s. The only documentary evidence I find in the Secretary’s file that even bears on the question of net income in 1967 and 1968 establishes to my satisfaction that Hendrickson is ineligible for coverage.
The court concludes that Hendrickson had no business expenses in 1967 and 1968 based on Hendrickson’s 1969 tax return, on which he claimed all his income as “wages” with no business deductions, and on a 1970 letter Hendrickson returned to the Secretary, ante at 752. The inference that Hendrickson had no business expenses in 1969 depends on his failure to take deductions in the face of an incentive to do so, that being his incentive to reduce his income tax bill. The same inference does not arise from Hendrickson’s failure to declare expenses in 1967 and 1968 because Hendrickson owed no income taxes. Because the failure to declare expenses is not probative of Hendrickson’s net income, there is no logical basis in the Secretary’s file upon which to conclude that his net income equals his gross income.
In my view, the 1970 letter conclusively establishes Hendrickson’s ineligibility for any self-employment credit in 1967 or 1968. Hendrickson did not simply decline to respond to the Secretary’s request for an estimate of his 1967-68 business expenses. Instead, he responded that he “did not make enough income to file.” The law requires filing by all taxpayers who earn more than $400 in net self-employment income, regardless of liability for personal income tax. I.R.C. § 6017. I agree with the court, ante at 750, that the Secretary’s file clearly establishes Hendrickson’s self-employed status. Thus, based on the law and the documentary evidence in the Secretary’s file, Hendrickson’s net income in 1967 and 1968 must have been less than $400, in which case he is ineligible for any quarters of coverage. 42 U.S.C. § 411(b)(2); 20 C.F.R. § 404.1096(c)(1).
With or without Grigg, Hendrickson’s file contains neither a tax return nor any other documentary evidence of qualifying self-employment income for 1967 or 1968. Thus, section 405(c)(4)(C) bars the award of any additional quarters for those years. Without credits for 1967 and 1968, Hen-drickson cannot meet the eligibility requirement. Accordingly, I would affirm the district court.