Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
1668868
label
1974/12/31 HR3538 Relief of Selmer Amundson
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
1668868
sourceUrl
contentType
document
title
1974/12/31 HR3538 Relief of Selmer Amundson
citationUrl
collections
White House Records Office: Legislation Case Files
Legislation Case Files
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
1668868
coverageEndDate
logicalDate
1974-12-31
month
12
year
1974
coverageStartDate
logicalDate
1974-12-01
month
12
year
1974
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
9393985088584cba
ocrText
The original documents are located in Box 18, folder "1974/12/31 HR3538 Relief of Selmer
Amundson" of the White House Records Office: Legislation Case Files at the Gerald R.
Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Digitized from Box 18 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential 12/31
APPROVED DEC 31 1974
ACTION
THE WHITE HOUSE
Last Day: December 31
WASHINGTON
Posted m alrado
December 28, 1974
To ARCHINES
1/3/75
MEMORANDUM FOR
THE PRESIDENT
FROM:
KEN COLE
SUBJECT:
Enrolled Bill H.R. 3538
For the Relief of Selmer Amundson
Attached for your consideration is H.R. 3538, sponsored
by Representative Nelsen, which would enable Selmer Amundson
to qualify for disability insurance benefits by permitting
the crediting of self-employment income for 1964-1966 to
his social security earnings record after the time allowable
under present law.
The bill also contains a rider which would add Montana to
the list of states which may include policemen and firemen
in their voluntary agreements with HEW for coverage of
State and local employees under the social security system.
OMB recommends approval and provides additional background
information in its enrolled bill report (Tab A).
Phil Areeda and Max Friedersdorf both recommend approval.
RECOMMENDATION
That you sign H.R. 3538 (Tab B).
FORD LIBRARY GREAT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
DEC 24 1974
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 3538 - For the relief of
Selmer Amundson
Sponsor - Rep. Nelsen (R) Minnesota
Last Day for Action
December 31, 1974 - Tuesday
Purpose
Waives the applicable statute of limitation provision of
the Social Security Act in order to authorize the crediting
for social security disability purposes of Selmer Amundson's
self-employment income for 1964 through 1966; amends the
Act to permit social security coverage of policemen and
firemen in Montana.
Agency Recommendations
Office of Management and Budget
Approval
Department of Health, Education,
and Welfare
Approval
Discussion
H.R. 3538 would enable Selmer Amundson to qualify for
disability insurance benefits by permitting the crediting
of self-employment income for 1964-1966 to his social
security earnings record after the time allowable under
present law. The bill also contains a rider which would
add Montana to the list of States which may include policemen
and firemen in their voluntary agreements with HEW for
coverage of State and local employees under the social
security system.
2
Selmer Amundson. In order to be insured for disability benefits
under the social security program, it is necessary for a
person to have at least 5 years (20 quarters) of social
security coverage during the 10-year period ending with the
quarter in which he becomes disabled. The Social Security
Act provides that self-employment income for any year may
not be credited for social security purposes unless a tax
return is filed with the Internal Revenue Service before the
expiration of 3 years, 3 months, and 15 days following the
end of that year.
Mr. Amundson applied for disability benefits in February 1971,
stating that he had been disabled since 1968. Upon being
advised by the Social Security Administration that his social
security earnings record showed no earnings credits for the
years 1964 through 1968, Mr. Amundson stated that he had
net earnings from self-employment in those years sufficient
to provide four quarters of social security coverage in each
year.
An investigation of the discrepancy revealed that Mr. Amundson's
accountant, who had been entrusted with the appropriate
tax documents and payments, had failed to file Mr. Amundson's
tax returns for each of the years 1964 through 1968. At
the time of congressional consideration of this bill, the
accountant had been indicted on 31 counts of income tax
evasion, including a count involving failure to pay Mr. Amundson's
tax.
Mr. Amundson's tax attorney filed tax returns for the years
involved, and paid the taxes due, in December, 1971. Accordingly,
under the statute of limitations provision, Mr. Amundson
received social security earnings credit for 1967 and 1968,
but could not receive credit for the three preceding years.
As a result, Mr. Amundson cannot meet the statutory require-
ments for eligibility for social security disability benefits
without special legislative relief.
H.R. 3538 would authorize Mr. Amundson's 1964-1966 earnings
to be credited to his earnings record, thus permitting him
to qualify for disability benefits. HEW submitted a report
to the House Judiciary Committee in June, 1974 indicating
that it had no objection to H.R. 3538. In its report, HEW
stated:
KINKARY
3
"It seems to us that the situation of Mr. Amundson
is a particularly unfortunate one. Mr. Amundson was
correct and conventional in his handling of his tax
returns and tax payments for the years 1964 through
1968, and except for the abuse of trust by his
accountant would have had social security credit for
all of these years. An extremely unusual feature of
the present case is the fact that the preparation of
Mr. Amundson's tax returns and his payment to the
accountant of taxes due occurred in each of 5
different years. The fact that the accountant con-
tinued as an apparently reputable member of his
profession and community during all of this period
and beyond would certainly tend to confirm to a
person in Mr. Amundson's situation that his tax
returns were being properly filed.
"Although we ordinarily oppose enactment of private
relief bills giving special treatment to individuals
under the social security program, we believe that.
Mr. Amundson's situation is so unusual and so
deserving of remedy that we do not oppose enactment
of H.R. 3538."
Montana Rider. Current law permits some 20 States and
Puerto Rico to include policemen and firemen in their
voluntary agreements with HEW to provide social security
coverage for State and local employees. H.R. 3538 would
add Montana to this list of States. In its letter on the
enrolled bill, HEW states that although the Department
favors general language to eliminate the statutory pro-
hibition against the coverage of policemen and firemen
under the voluntary agreements with States, it has no
objection to granting Montana an exemption already enjoyed
by a number of other States.
Neefoed
Assistant Director for
Legislative Reference
Enclosure
BEAULD 1. FORD LIBRARY
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 836
Date: December 26, 1974
Time: 9:00 a.m.
FOR ACTION: Pam Needham who
CC (for information): Warren Handriks
Max Friedersdorf o.k.
Jerry Jones
Phil Areeda no obj
FROM THE STAFF SECRETARY
DUE: Date: Monday, December 26
Time: 3:00 p.m.
SUBJECT:
Enrolled Bill H.R. 3538 - For the relief of Selmer Amundson
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
и
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
Please returntto Judy Johnston, Ground Floor West Wing
BERA n YORD LIBRARY
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately
For the President
THE WHITE HOUSE
ON MEMORANDUM
WASHINGTON
LOG NO.: 836
Date: December 26, 1974
Time: 9:00 a.m.
FOR ACTION: Pam Needham
CC (for information): Warren Hendriks
Max Friedersdorf
Jerry Jones
Phil Areeda
FROM THE STAFF SECRETARY
DUE: Date: Monday, December 26
Time: 3:00 p.m.
SUBJECT:
Enrolled Bill H.R. 3538 - For the relief of Selmer Amundson
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
X
Prepare Agenda and Brief
Draft Reply
X For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
GERALS ? FORD
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
telephone the Staff Secretary immediately.
Warren K, Hendriks
For the President
THE WHITE HOUSE
WASHINGTON
December 26, 1974
WARREN HENDRIKS
MEMORANDUM FROM: Ven FOR: MAX L.
FRIEDERSDORF
SUBJECT:
Action Memorandum - Log No. 836
Enrolled Bill H.R. 3538 - Relief of Selmer Amundson
The Office of Legislative Affairs concurs in the attached proposal
and has no additional recommendations.
Attachment
STATE FORD LIBRARY
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 836
Date: December 26, 1974
Time: 9:00 a.m.
FOR ACTION: Pam Needham oh
CC (for information): Warren Heedriks
Max Friedersdorf o.k.
Jerry Jones
Phil Areeda
FROM THE STAFF SECRETARY
DUE: Date: December 28
Time: 3:00 p.m.
SUBJECT:
Enrolled Bill H.R. 3538 - For the relief of Selmer Amundson
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
X
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please returntto Judy Johnston, Ground Floor West Wing
No objection
P. And
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R: COLE, JR.
telephone the Staff Secretary immediately
For the President
HEALTH.
OF
DESUCATION.
DEPARTMENT OF HEALTH, EDUCATION. AND WELFARE
U.S.A.
Honorable Roy L. Ash
Director
Office of Management and Budget
DEC 24 1974
Washington, D. C. 20503
Dear Mr. Ash:
This is in response to Mr. Rommel's request for a report
on H.R. 3538, an enrolled bill "For the relief of
Selmer Amundson." "
The first section of the bill is a private relief measure
that would grant Mr. Selmer Amundson credit for covered
self-employment under the OASDI program during 1964
through 1968 even though the social security taxes on
that self-employment were paid after the statute of
limitations on the reporting and crediting of covered
self-employment had run. It appears from the available
information that Mr. Amundson believed that he had paid
his social security taxes for these years in a timely
manner through his accountant, who was given funds for
that purpose. However, the Internal Revenue Service has
no record of having received those taxes and there is
information that the accountant has been indicted on a
charge arising out of his handling of Mr. Amundson's tax
returns. Because of these special circumstances, the
Department reported to the Congress that it had no objection
to enactment of what is now the first section of the
enrolled bill. A copy of the report is enclosed. We
continue to believe that Mr. Amundson's case is sufficiently
meritorious to warrant an exception to our normal
opposition to private relief from the social security
laws. We therefore support enactment of this section of
the bill.
Section 2 of the bill would add Montana to the list of States
which may include policemen and firemen in their voluntary
agreements for coverage of State and local employees under
the OASDI program. The Department supports general
legislation to eliminate the prohibition against the
FORD
BERALD
Honorable Roy L. Ash - Page 2
coverage of policemen and firemen under voluntary agreements
with the States. In the absence of such legislation, we
have no objection to granting Montana an exemption from
the prohibition already enjoyed by some twenty States and
the Commonwealth of Puerto Rico.
The Department therefore supports enactment of the enrolled
bill and recommends that it be signed into law.
Sincerely,
Secretary
Enclosure
R. FORD
DEPARTMENT OF HEALTH. EDUCATION, AND WELFARE
JUN 19 1974
Honorable Peter W. Rodino, Jr.
Chairman, Committee on the Judiciary
House of Representatives
Washington, D.C. 20515
Dear Mr. Chairman:
This 1a in response to your request for a report on H.R. 3538. a bill
"For the relief of Selmer Amundson."
The bill provides that for purposes of determining Mr. Amundson's
entitlement to disability insurance benefits his income tax returns for
the years 1964 through 1968, which were filed in 1971, would be deemed
to have been filed before the expiration of the period of time for
filing such returns provided in a statute of limitations in the Social
Security Act and that his net income from self-employment in those
years would be credited under social security.
H.R. 3538 would exempt Mr. Amundson from the effect of the statute of
limitations provision with respect to the crediting of his self-employment
income for 1964 through 1966. (His self-employment income for 1967 and
1968 is already credited to his social security earnings record.) Under
this provision of the Act self-amployment income reported by a person for
a year may not be credited for social security purposes unless a tax return
is filed with the Internal Revenue Service before the expiration of 3 years,
3 months, and 15 days following the end of that year.
Mr. Amindson filed an application for social security disability insurance
benefits in February 1971, stating that he had been disabled since November
1968. Under the law, to be insured for disability benefits it is necessary
for Mr. Amundson to have at least 20 quarters of social security coverage
in the period of 40 calendar quarters ending with the quarter in which he
became disabled. When Mr. Amundson wes advised that his social security
earnings record showed no earnings credits for the years 1964 through 1968
he stated that he had net earnings from self-employment in those years in
amounts sufficient to provide four quarters of social security coverage in
each year.
Mr. Amundson believed that he had filed timely tax returns for the years
in question. He stated that his accountant had prepared a timely tax
return for each of these years and on each occasion had been given cash
BEALU FORD LIBRARY
Page 3 - Honorable Peter W. Rodino, Jr.
We are advised by the Office of Management and Budget that there is no
objection to the presentation of this report from the standpoint of the
Administration's program.
Sincerely,
1s1 Caspar W. Weinberger
Secretary
Enclosure
STATE n FORD LIBRARY
Memorandum to Accompany
the Report of the Department of Health, Education, and Welfare
on H.R. 3538
On February 25, 1971, Mr. Selmer Amundson filed an application for
disability insurance benefits indicating that he had been disabled since
November 15, 1968, due to a heart condition and arthritis. His claim
for benefits wes denied initially and upon reconsideration because he
did not meet the insured-status (work) requirement to be eligible for dis-
ability insurance benefits. Mr. Amundson did not file a request for a
hearing in his case.
Under the Social Security Act one of the requirements to be insured
for disability benefits is that the disabled worker must have had
substantial recent work covered under social security before he became
disabled. This requirement provides some assurance that the protection
afforded by the disability provisions will be related to the loss of
covered earnings occasioned by disability. To meet this requirement
Mr. Amundson would need at least 20 quarters (5 years) of social security
coverage during the period of 40 calendar quarters (10 years) ending
with the quarter in which he became disabled (December 1968 according
to Mr. Ammdson). For self-employed people a quarter of coverage is
any calendar quarter in which a person has been credited with $100 or
more in self-cmployment income (providing that he had at least $400 in
net earnings from self-employment for the year). Social Security
Administration records show that Mr. Amundson has only 12 quarters of
coverage in the pertinent 40-quarter period.
Although his social security earnings record showed no self-employment
income for the years 1964 through 1968, Mr. Amundson alleged that he
had net earnings from self-employment of at least $400 for those years.
Credit for this employment would give him enough quarters of coverage
to be insured for disability benefits based on the date he alleged he
became disabled. The evidence submitted by Mr. Amindson indicates that
his income tax returns for the years 1964 through 1968 were prepared
timely by Mr. Robert Sherman of Albert Len, Minnesota. The evidence
FORD LIBRARY
indicates Mr. Ammdson paid Mr. Sherman each year the income and
self-employment tax due and a fee for Mr. Shorman's services. However,
Mr. Sherman apparently kept the money and did not forward the tex
returns to the Internal Revenue Service. Mr. Amindson's attorney
reported that Mr. Sharman has been indicted on 31 counts of income tax
evasion, and one of the counts involved his failure to pay Mr. Amundson's
tax. We do not know the outcome of the indictment. Mr. Amindson's
attorney filed income tax returns for the years involved on or about
December 18, 1971, and paid the income and self-employment taxes due.
Section 205(c)(4) of the Social Security Act provides in part that prior
to the expiration of the time limitation of 3 years, 3 months, and
19 days following any year, the Secretary, if it is brought to his
attention, may correct or delete an erroneous entry of self-exployment
income on an individual's record or he may include on entry which has
been omitted. After the expiration of the time limitation, the absence
of an entry of self-employment income on an individual's record shall
be conclusive proof that self-employment income was not derived for
that year unless it can be established that a tax return reporting such
income was filed before the expiration of the time limitation.
Section 205(c)(5) of the Act provides in part that after the expiration
of the time limitation following may year in which self-amployment
income was alleged to have been derived by on individual, the Becretary
may include an entry of self-employment income in his records, if an
application for monthly benefits is filed within the time limitation
following such year.
This time limitation resulted from the need for orderliness and finality
in the administration of the social security program. The provision
gives individuals adequate time to file reports of their self-amployment
earnings but at the same time limits the possibilities for musigulation
of the social security program by people who might otherwise delay filing
their self-employment tax returns and paying social security taxes until
a later time when it appeared that social security coverage would be
to their financial advantage.
Under the statute of limitations provision of the Internal Revenue Code,
however, when a self-exployed person does not file an income tax return
for a given year the Internal Revenue Service can assess the self-employment
tax on the earnings for that year at any time in the fature. As a result
of the differences between the statute of limitations in the Internal
Revenue Code and the Social Security Act in some situations - individual
can be required by the Internal Revenue Service to pay social security
taxes even though the self-employment income on which the taxes are
based cannot be credited under social security.
Since Mr. Amundson filed for benefits in February 1971 the time
limitation had not expired for the years 1967 and 1968 and his self-employment
income for those years has been credited to his social security earnings
record. However, since the time limitation had expired for the years 1954,
1965, and 1966, earnings from self-amployment for those years may not be
credited under social security,
Thus, Mr. Amundson has credit for 12 quarters of coverage in the 40-quarter
period ending with the quarter he alleges be became disabled, and be is
not insured for social security disability benefits.
R. FORD VIBRARY
IFE-3:kf
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 836
Date: December 26, 1974
Time: 9:00 a.m.
FOR ACTION: Pam Needham
CC (for information): Warren Hendriks
Max Friedersdorf
Jerry Jones
Phil Areeda
FROM THE STAFF SECRETARY
DUE: Date: Monday, December 26
Time: 3:00 p.m.
SUBJECT:
Enrolled Bill H.R. 3538 - For the relief of Selmer Amundson
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
X
Prepare Agenda and Brief
Draft Reply
X
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
No objection Aut
OK
STATE R. FORD LIBRARY
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
-
delay in submitting the required material, please
telephone the Staff Secretary immediately.
Warren
12-3:34 Handrida 3:30pm.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
DEC 24 1974
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 3538 - For the relief of
Selmer Amundson
Sponsor - Rep. Nelsen (R) Minnesota
Last Day for Action
December 31, 1974 - Tuesday
Purpose
Waives the applicable statute of limitation provision of
the Social Security Act in order to authorize the crediting
for social security disability purposes of Selmer Amundson's
self-employment income for 1964 through 1966; amends the
Act to permit social security coverage of policemen and
firemen in Montana.
Agency Recommendations
Office of Management and Budget
Approval
Department of Health, Education,
and Welfare
Approval
Discussion
H.R. 3538 would enable Selmer Amundson to qualify for
disability insurance benefits by permitting the crediting
of self-employment income for 1964-1966 to his social
security earnings record after the time allowable under
present law. The bill also contains a rider which would
add Montana to the list of States which may include policemen
and firemen in their voluntary agreements with HEW for
coverage of State and local employees under the social
security system.
R. FORD LIBRARY
93D CONGRESS
HOUSE OF REPRESENTATIVES
REPORT
2d Session
No. 93-1317
1.
FORD
SELMER AMUNDSON
LIBRARY
AUGUST 22, 1974.-Committed to the Committee of the Whole House and
ordered to be printed
Mr. BUTLER, from the Committee on the Judiciary,
submitted the following
REPORT
[To accompany H.R. 3538]
The Committee on the Judiciary to whom was referred the bill
(H.R. 3538) for the relief of Selmer Amundson, having considered
the same, report favorably thereon without amendment and recom-
mend that the bill do pass.
PURPOSE
The purpose of the proposed legislation is to waive applicable limi-
tations to permit the credit of self-employment income for 1964
through 1966 to Selmer Amundson for qualification for disability in-
surance benefits under section 223 of the Social Security Act (and to
the establishment of a period of disability under section 216(i) of
such Act).
STATEMENT
The Department of Health, Education and Welfare in its report to
the committee on the bill has stated that it has no objection to the bill.
H.R. 3538 would exempt Mr. Amundson from the effect of the
statute of limitations provision with respect to the crediting of his
self-employment income for 1964 through 1966. (His self-employment
income for 1967 and 1968 is already credited to his social security
earnings record.) Under this provision of the Act self-employment
income reported by a person for a year may not be credited for social
security purposes unless a tax return is filed with the Internal Revenue
Service before the expiration of 3 years, 3 months and 15 days follow-
ing the end of that year.
Mr. Amundson filed an application for social security disability in-
surance benefits in February 1971, stating that he had been disabled
since November 1968. To be insured for disability benefits it is neces-
sary to have at least 20 quarters of social security coverage in the pe-
38-007
2
3
riod of 40 calendar quarters ending with the quarter in which he be-
came disabled. Mr. Amundson was advised that his social security
earnings record showed no earnings credits for the years 1964 through
DEPARTMENT OF HEALTH, EDUCATON, AND WELFARE,
1968. He stated that he had net earnings from self-employment in
W ashington, D.C., June 19, 1974.
those years in amounts sufficient to provide four quarters of social
Hon. PETER W. RODINO, Jr.,
security coverage in each year.
Chairman, Committee on the Judiciary,
Mr. Amundson believed that he had filed timely tax returns for the
House of Representatives, ashington, D.C.
years in question. He stated that his accountant had prepared a timely
DEAR MR. CHAIRMAN: This is in response to your request for a
tax return for each of these years and on each occasion had been given
report on H.R. 3538, a bill "For the relief of Selmer Amundson."
cash by Mr. Amundson to pay all of the taxes due. Mr. Amundson has
The bill provides that for purposes of determining Mr. Amundson's
receipts given to him by the accountant on each occasion. However, the
entitlement to disability insurance benefits his income tax returns for
Internal Revenue Service has no record of receiving the tax returns
the years 1964 through 1968, which were filed in 1971, would be deemed
prepared by the accountant. In 1971, the following exposure of the
to have been filed before the expiration of the period of time for filing
situation, the accountant attempted to make belated payment of the
such returns provided in a statute of limitations in the Social Security
taxes for Mr. Amundson's account. The committee has been advised
Act and that his net income from self-employment in those years would
that the accountant has been indicted on tax-related charges and that
be credited under social security.
one of the charges arises from his failure to file Mr. Amundson's tax
H.R. 3538 would exempt Mr. Amundson from the effect of the
returns and pay the taxes.
statute of limitations provision with respect to the crediting of his
On the basis of tax returns filed in December 1971 for the years 1964
self-employment income for 1964 through 1966. (His self-employment
through 1968 by Mr. Amundson's attorney, Mr. Amundson received
income for 1967 and 1968 is already credited to his social security earn-
social security earnings credit for 1968. Since Mr. Amundson's appli-
ings record.) Under this provision of the Act self-employment income
cation for social security benefits was filed in February 1971 before
reported by a person for a year may not be credited for social security
the statute of limitations had expired for 1967, under another provi-
purposes unless a tax return is filed with the Internal Revenue Service
sion in social security law he also received earnings credit for 1967. As
before the expiration of 3 years, 3 months, and 15 days following the
the statute of limitations had expired for the years prior to 1967, no
end of that year.
social security credit could be given for the years 1964, 1965, and 1966.
Mr. Amundson filed an application for social security disability
As a result Mr. Amundson does not meet the insured-status require-
insurance benefits in February 1971, stating that he had been disabled
ments provided in the law for eligibility for social security disability
since November 1968. Under the law, to be insured for disability bene-
benefits.
fits it is necessary for Mr. Amundson to have at least 20 quarters of
The committee feels that the report of the Department of Health
social security coverage in the period of 40 calendar quarters ending
Education and Welfare summarizes the factors which justify legisla-
with the quarter in which he became disabled. When Mr. Amundson
tive relief in this instance. In indicating it had not objection to the bill
was advised that his social security earnings record showed no earnings
the department stated
credits for the years 1964 through 1968 he stated that he had net earn-
"It seems to us that the situation of Mr. Amundson is a particularly
ings from self-employment in those years in amounts sufficient to pro-
unfortunate one. Mr. Amundson was correct and conventional in his
vide four quarters of social security coverage in each year.
handling of his tax returns and tax payments for the years 1964
Mr. Amundson believed that he had filed timely tax returns for the
through 1968, and except for the abuse of trust by his accountant
years in question. He stated that his accountant had prepared a timely
would have had social security credit for all of these years. An ex-
tax return for each of these years and on each occasion had been given
tremely unusual feature of the present case is the fact that the prep-
cash by Mr. Amundson to pay all of the taxes due. Mr. Amundson has
aration of Mr. Amundson's tax returns and his payment to the ac-
receipts given to him by the accountant on each occasion. However,
countant of taxes due occurred in each of 5 different years. The fact
the Internal Revenue Service has no record of receiving the tax returns
that the accountant continued as an apparently reputable member of
prepared by the accountant. In 1971, following exposure of the situa-
his profession and community during all of this period and beyond
tion, the accountant attempted to make belated payment of the taxes
would certainly tend to confirm to a person in Mr. Amundson's situ-
for Mr. Amundson's account. There is also information that the ac-
ation that his tax returns were being propertly filed.
countant has been indicted on tax-related charges and that one of the
"Although we ordinarily oppose enactment of private relief bills
charges arises from his failure to file Mr. Amundson's tax returns and
giving special treatment to individuals under the social security pro-
pay the taxes.
gram, we believe that Mr. Amundson's situation is SO unusual and SO
On the basis of tax returns filed in December 1971 for the years 1964
deserving of remedy that we do not oppose enactment of H.R. 3538."
through 1968 by Mr. Amundson's attorney, Mr. Amundson received
The committee recommends that the bill be considered favorably.
social security earnings credit for 1968. Since Mr. Amundson's applica-
tion for social security benefits was filed in February 1971 before the
statute of limitations had expired for 1967, under another provision in
H.R. 1317
H.R. 1317
4
5
social security law he also received earnings credit for 1967. As the
ending with the quarter in which he became disabled (December 1968
statute of limitations had expired for the years prior to 1967, no social
according to Mr. Amundson): For self-employed people a quarter of
security credit could be given for the years 1964, 1965, and 1966. As a
coverage is any calendar quarter in which a person has been credited
result Mr. Amundson does not meet the insured-status requirements
with $100 or more in self-employment income (providing that he had
provided in the law for eligibility for social security disability benefits.
at least $400 in net earnings from self-employment for the year).
A more detailed discussion of the facts in the case and the provisions
Social Security Administration records show that Mr. Amundson has
of law that are involved is included in the enclosed memorandum pre-
only 12 quarters of coverage in the pertinent 40-quarter period.
pared by the Social Security Administration.
Although his social security earnings record showed no self-employ-
In view of inequitable and anomalous situations that can arise under
ment income for the years 1964 through 1968, Mr. Amundson alleged
the present statute of limitations we are studying the feasibility of pro-
that he had net earnings from self-employment of at least $400 for
posing modification SO as to permit crediting of additional self-employ-
those years. Credit for this employment would give him enough
ment earnings without exposing the social security program to misuse.
quarters of coverage to be insured for disability benfits based on the
It seems to us that the situation of Mr. Amundson is a particularly
date he alleged he became disabled. The evidence submitted by Mr.
unfortunate one. Mr. Amundson was correct and conventional in his
Amundson indicates that his income tax returns for the years 1964
handling of his tax returns and tax payments for the years 1964
through 1968 were prepared timely by Mr. Robert Sherman of Albert
through 1968 and except for the abuse of trust by his accountant would
Lea, Minnesota. The evidence indicates Mr. Amundson paid Mr. Sher-
have had social security credit for all of these years. An extremely
man each year the income and self-employment tax due and a fee for
unusual feature of the present case is the fact that the preparation of
Mr. Sherman's services. However, Mr. Sherman apparently kept the
Mr. Amundson's tax returns and his payment to the accountant of
money and did not forward the tax returns to the Internal Revenue
taxes due occurred in each of 5 different years. The fact that the ac-
Service. Mr. Amundson's attorney reported that Mr. Sherman has
countant continued as an apparently reputable member of his pro-
been indicted on 31 counts of income tax evasion, and one of the counts
fession and community during all of this period and beyond would
involved his failure to pay Mr. Amundson's tax. We do not know the
certainly tend to confirm to a person in Mr. Amundson's situation that
outcome of the indicament. Mr. Amundson's attorney filed income tax
his tax returns were being properly filed.
returns for the years involved on or about December 18, 1971, and paid
Although we ordinarily oppose enactment of private relief bills
the income and self-employment taxes due.
giving special treatment to individuals under the social security pro-
Section 205 (c) (4) of the Social Security Act provides in part that
gram, WC believe that Mr. Amundson's situation is SO unusual and SO
prior to the expiration of the time limitation of 3 years, 3 months, and
deserving of remedy that we do not oppose enactment of H.R. 3538.
15 days following any year, the Secretary, if it is brought to his atten-
We are advised by the Office of Management and Budget that there
tion, may correct or delete an erroneous entry of self-employment
is no objection to the presentation of this report from the standpoint
income on an individual's record or he may include an entry which
of the Administration's program.
has been omitted. After the expiration of the time limitation, the
Sincerely,
absence of an entry of self-employment income on an individual's
CASPAR W. WEINBERGER, Secretary.
record shall be conclusive proof that self-employment income was not
Enclosure.
derived for that year unless it can be established that a tax return
reporting such income was filed before the expiration of the time limi-
MEMORANDUM TO ACCOMPANY THE REPORT OF THE DEPARTMENT OF
tation. Section 205 (c) (5) of the Act provides in part that after the
HEALTH, EDUCATION, AND WELFARE ON H.R. 3538
expiration of the time limitation following any year in which self-
employment income was alleged to have been derived by an individual,
On February 25, 1971, Mr. Selmer Amundson filed an application
the Secretary may include an entry of self-employment income in his
for disability insurance benefits indicating that he had been disabled
records, if an application for monthly benefits is filed within the time
since November 15, 1968, due to a heart condition and arthritis. His
limitation following such year.
claim for benefits was denied initially and upon reconsideration
This time limitation resulted from the need for orderliness and
because he did not meet the insured-status (work) requirement to be
finality in the administration of the social security program. The pro-
eligible for disability insurance benefits. Mr. Amundson did not file
vision gives individuals adequate time to file reports of their self-
a request for a hearing in his case.
employment earnings but at the same time limits the possibilities for
Under the Social Security Act one of the requirements to be insured
manipulation of the social security program by people who might
for disability benefits is that the disabled worker must have had sub-
otherwise delay filing their self-employment tax returns and paying
stantial recent work covered under social security before he became
social security taxes until a later time when it appeared that social
disabled. This requirement provides some assurance that the protec-
security coverage would be to their financial advantage.
tion afforded by the disability provisions will be related to the loss of
Under the statute of limitations provision of the Internal Revenue
covered earnings occasioned by disability. To meet this requirement
Code, however, when a self-employed person does not file an income
Mr. Amundson would need at least 20 quarters (5 years) of social
tax return for a given year the Internal Revenue Service can assess
security coverage during the period of 40 calendar quarters (10 years)
the self-employment tax on the earnings for that year at any time in
H.R. 1317
H.R. 1317
6
the future. As a result of the differences between the statute of limita-
tions in the Internal Revenue Code and the Social Security Act in
some situations an individual can be required by the Internal Revenue
Service to pay social security taxes even though the self-employment
income on which the taxes are based cannot be credited under social
security.
Since Mr. Amundson filed for benefits in February 1971 the time
limitation had not expired for the years 1967 and 1968 and his self-
employment income for those years has been credited to his social
security earnings record. However, since the time limitation had ex-
pired for the years 1964, 1965, and 1966, earnings from self-employ-
ment for those years may not be credited under social security.
Thus, Mr. Amundson has credit for 12 quarters of coverage in the
40-quarter period ending with the quarter he alleges he became dis-
abled, and he is not insured for social security disability benefits.
H.R. 1317
Calendar No. 1243
93D CONGRESS
SENATE
REPORT
2d Session
No. 93-1312
SELMER AMUNDSON
DECEMBER 9, 1974.-Ordered to be printed
Mr. LONG, from the Committee on Finance,
submitted the following
REPORT
[To accompany H.R. 3538]
The Committee on Finance, to which was referred the bill (H.R.
3538) having considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
PURPOSE
The purpose of the proposed legislation is to waive applicable limi-
tations to permit the credit of self-employment income for 1964
through 1966 to Selmer Amundson for qualification for disability in-
surance benefits under section 223 of the Social Security Act (and to
the establishment of a period of disability under section 216(i) of
such Act).
STATEMENT
The Department of Health, Education, and Welfare in its report to
the committee on the bill has stated that it has no objection to the bill.
H.R. 3538 would exempt Mr. Amundson from the effect of the
statute of limitations provision with respect to the crediting of his
self-employment income for 1964 through 1966. (His self-employment
income for 1967 and 1968 is already credited to his social security
earnings record.) Under this provision of the Act self-employment
income reported by a person for a year may not be credited for social
security purposes unless a tax return is filed with the Internal Revenue
Service before the expiration of 3 years, 3 months and 15 days follow-
ing the end of that year.
Mr. Amundson filed an application for social security disability in-
surance benefits in February 1971, stating that he had been disabled
since November 1968. To be insured for disability benefits it is neces-
sary to have at least 20 quarters of social security coverage in the pe-
38-010
2
3
riod of 40 calendar quarters ending with the quarter in which he be-
DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,
came disabled. Mr. Amundson was advised that his social security
Washington, D.C., December 4, 1974.
earnings record showed no earnings credits for the years 1964 through
Hon. RUSSELL B. LONG,
1968. He stated that he had net earnings from self-employment in
Chairman, Committee on Finance,
those years in amounts sufficient to provide four quarters of social
U.S. Senate, Washington, D.C.
security coverage in each year.
DEAR MR. CHAIRMAN This is in response to your request for a report
Mr. Amundson believed that he had filed timely tax returns for the
on H.R. 3538, a bill "For the relief of Selmer Amundson."
years in question. He stated that his accountant had prepared a timely
The bill provides that for purposes of determining Mr. Amundson's
tax return for each of these years and on each occasion had been given
entitlement to disability insurance benefits his income tax returns for
cash by Mr. Amundson to pay all of the taxes due. Mr. Amundson has
the years 1964 through 1968, which were filed in 1971, would be deemed
receipts given to him by the accountant on each occasion. However, the
to have been filed before the expiration of the period of time for filing
Internal Revenue Service has no record of receiving the tax returns
such returns provided in a statute of limitations in the Social Security
prepared by the accountant. In 1971, following exposure of the situ-
Act and that his net income from self-employment in those years would
ation, the accountant attempted to make belated payment of the taxes
be credited under social security.
for Mr. Amundson's account. The committee has been advised that
H.R. 3538 would exempt Mr. Amundson from the effect of the statute
the accountant has been indicted on tax-related charges and that one
of limitations provision with respect to the crediting of his self-
of the charges arises from his failure to file Mr. Amundson's tax re-
employment income for 1964 through 1966. (His self-employment
turns and pay the taxes.
income for 1967 and 1968 is already credited to his social security earn-
On the basis of tax returns filed in December 1971 for the years 1964
ings record.) Under this provision of the Act self-employment income
through 1968 by Mr. Amundson's attorney, Mr. Amundson received
reported by a person for a year may not be credited for social security
social security earnings credit for 1968. Since Mr. Amundson's appli-
purposes unless a tax return is filed with the Internal Revenue Service
cation for social security benefits was filed in February 1971 before
before the expiration of 3 years, 3 months, and 15 days following the
the statute of limitations had expired for 1967, under another provi-
end of that year.
sion in social security law he also received earnings credit for 1967. As
Mr. Amundson filed an application for social security disability
the statute of limitations had expired for the years prior to 1967, no
insurance benefits in February 1971, stating that he had been disabled
social security credit could be given for the years 1964, 1965, and 1966.
since November 1968. Under the law, to be insured for disability bene-
As a result Mr. Amundson does not meet the insured-status require-
fits it is necessary for Mr. Amundson to have at least 20 quarters of
ments provided in the law for eligibility for social security disability
social security coverage in the period of 40 calendar quarters ending
benefits.
with the quarter in which he became disabled. When Mr. Amundson
The committee feels that the report of the Department of Health,
was advised that his social security earnings record showed no earnings
Education, and Welfare summarizes the factors which justify legisla-
credits for the years 1964 through 1968 he stated that he had net earn-
tive relief in this instance. In indicating it had no objection to the bill
ings from self-employment in those years in amounts sufficient to pro-
the department stated:
vide four quarters of social security coverage in each year.
"It seems to us that the situation of Mr. Amundson is a particularly
Mr. Amundson believed that he had filed timely tax returns for the
unfortunate one. Mr. Amundson was correct and conventional in his
years in question. He stated that his accountant had prepared a timely
handling of his tax returns and tax payments for the years 1964
tax return for each of these years and on each occasion had been given
through 1968, and except for the abuse of trust by his accountant
cash by Mr. Amundson to pay all of the taxes due. Mr. Amundson has
would have had social security credit for all of these years. An ex-
receipts given to him by the accountant on each occasion. However,
tremely unusual feature of the present case is the fact that the prep-
the Internal Revenue Service has no record of receiving the tax returns
aration of Mr. Amundson's tax returns and his payment to the ac-
prepared by the accountant. In 1971, following exposure of the situa-
countant of taxes due occurred in each of 5 different years. The fact
tion, the accountant attempted to make belated payment of the taxes
that the accountant continued as an apparently reputable member of
for Mr. Amundson's account. There is also information that the ac-
his profession and community during all of this period and beyond
countant has been indicted on tax-related charges and that one of the
would certainly tend to confirm to a person in Mr. Amundson's situ-
charges arises from his failure to file Mr. Amundson's tax returns and
ation that his tax returns were being properly filed.
pay the taxes.
"Although we ordinarily oppose enactment of private relief bills
On the basis of tax returns filed in December 1971 for the years 1964
giving special treatment to individuals under the social security pro-
through 1968 by Mr. Amundson's attorney, Mr. Amundson received
gram, we believe that Mr. Amundson's situation is SO unusual and SO
social security earnings credit for 1968. Since Mr. Amundson's applica-
deserving of remedy that we do not oppose enactment of H.R. 3538."
tion for social security benefits was filed in February 1971 before the
The committee recommends that the bill be considered favorably.
statute of limitations had expired for 1967, under another provision
S.R. 1312
S.R. 1312
4
5
in social security law he also received earnings credit for 1967. As the
statute of limitations had expired for the years prior to 1967, no social
security coverage during the period of 40 calendar quarters (10 years)
ending with the quarter in which he became disabled (December 1968
security credit could be given for the years 1964, 1965, and 1966. As a
according to Mr. Amundson). For self-employed people a quarter of
result Mr. Amundson does not meet the insured-status requirements
coverage is any calendar quarter in which a person has been credited
provided in the law for eligibility for social security disability benefits.
with $100 or more in self-employment income (providing that he had
A more detailed discussions of the facts in the case and the provisions
at least $400 in net earnings from self-employment for the year).
of law that are involved is included in the enclosed memorandum pre-
Social Security Administration records show that Mr. Amundson has
pared by the Social Security Administration.
only 12 quarters of coverage in the pertinent 40-quarter period.
In view of inequitable and anomolous situations that can arise under
Although his social security earnings record showed no self-employ-
the present statute of limitations we are studying the feasibility of pro-
ment income for the years 1964 through 1968, Mr. Amundson alleged
posing modification SO as to permit crediting of additional self-employ-
that he had net earnings from self-employment of at least $400 for
ment earnings without exposing the social security program to misuse.
those years. Credit for this employment would give him enough quar-
It seems to us that the situation of Mr. Amundson is a particularly
ters of coverage to be insured for disability benefits based on the date
unfortunate one. Mr. Amundson was correct and conventional in his
he alleged he became disabled. The evidence submitted by Mr. Amund-
handling of his tax returns and tax payments for the years 1964
son indicates that his income tax returns for the years 1964 through
through 1968 and except for the abuse of trust by his accountant would
1968 were prepared timely by Mr. Robert Sherman of Albert Lea,
have had social security credit for all of these years. An extremely
Minnesota. The evidence indicates Mr. Amundson paid Mr. Sherman
unusual feature of the present case is the fact that the preparation of
each year the income and self-employment tax due and a fee for Mr.
Mr. Amundson's tax returns and his payment to the accountant of
Sherman's services. However, Mr. Sherman apparently kept the
taxes due occurred in each of 5 different years. The fact that the ac-
money and did not forward the tax returns to the Internal Revenue
countant continued as an apparently reputable member of his pro-
Service. Mr. Amundson's attorney reported that Mr. Sherman has
fession and community during all of this period and beyond would
been indicted on 31 counts of income tax evasion, and one of the counts
certainly tend to confirm to a person in Mr. Amundson's situation that
involved his failure to pay Mr. Amundson's tax. We do not know the
his tax returns were being properly filed.
outcome of the indictment. Mr. Amundson's attorney filed income tax
Although we ordinarily oppose enactment of private relief bills
returns for the years involved on or about December 18, 1971, and paid
giving special treatment to individuals under the social security pro-
the income and self-employment taxes due.
gram, we believe that Mr. Amundson's situation is SO unusual and SO
Section 205 (c) (4) of the Social Security Act provides in part that
deserving of remedy that we do not oppose enactment of H.R. 3538.
prior to the expiration of the time limitation of 3 years, 3 months, and
We are advised by the Office of Management and Budget that there
15 days following any year, the Secretary, if it is brought to his atten-
is no objection to the presentation of this report from the standpoint
tion, may correct or delete an erroneous entry of self-employment
of the Administration's program.
income on an individual's record or he may include an entry which
Sincerely,
has been omitted. After the expiration of the time limitation, the
CASPAR W. WEINBERGER, Secretary.
absence of an entry of self-employment income on an individual's
Enclosure.
record shall be conclusive proof that self-employment income was not
derived for that year unless it can be established that a tax return
MEMORANDUM TO ACCOMPANY THE REPORT OF THE DEPARTMENT OF
reporting such income was filed before the expiration of the time limi-
HEALTH. EDUCATION, AND WELFARE ON H.R. 3538
tation. Section 205 (c) (5) of the Act provides in part that after the
expiration of the time limitation following any year in which self-
On February 25, 1971, Mr. Selmer Amundson filed an application
employment income was alleged to have been derived by an individual,
for disability insurance benefits indicating that he had been disabled
the Secretary may include an entry of self-employment income in his
since November 15, 1968, due to a heart condition and arthritis. His
records, if an application for monthly benefits is filed within the time
claim for benefits was denied initially and upon reconsideration
limitation following such year.
because he did not meet the insured-status (work) requirement to be
This time limitation resulted from the need for orderliness and
eligible for disability insurance benefits. Mr. Amundson did not file
finality in the administration of the social security program. The pro-
a request for a hearing in his case.
vision gives individuals adequate time to file reports of their self-
Under the Social Security Act one of the requirements to be insured
employment earnings but at the same time limits the possibilities for
for disability benefits is that the disabled worker must have had sub-
manipulation of the social security program by people who might
stantial recent work covered under social security before he became
otherwise delay filing their self-employment tax returns and paying
disabled. This requirement provides some assurance that the protec-
social security taxes until a later time when it appeared that social
tion afforded by the disability provisions will be related to the loss of
security coverage would be to their financial advantage.
covered earnings occasioned by disability. To meet this requirement
Under the statute of limitations provision of the Internal Revenue
Mr. Amundson would need at least 20 quarters (5 years) of social
Code, however, when a self-employed person does not file an income
S.R. 1312
S.R. 1312
6
tax return for a given year the Internal Revenue Service can assess
the self-employment tax on the earnings for that year at any time in
the future. As a result of the differences between the statute of limita-
tions in the Internal Revenue Code and the Social Security Act in
some situations an individual can be required by the Internal Revenue
Service to pay social security taxes even though the self-employment
income on which the taxes are based cannot be credited under social
security.
Since Mr. Amundson filed for benefits in February 1971 the time
limitation had not expired for the years 1967 and 1968 and his self-
employment income for those years has been credited to his social
security earnings record. However, since the time limitation had ex-
pired for the years 1964, 1965, and 1966, earnings from self-employ-
ment for those years may not be credited under social security.
Thus, Mr. Amundson has credit for 12 quarters of coverage in the
40-quarter period ending with the quarter he alleges he became dis-
abled, and he is not insured for social security disability benefits.
S.R. 1312
LIBRARY
H. R. 3538
FORD
Ainety-third Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the twenty-first day of January,
one thousand nine hundred and seventy-four
An Act
For the relief of Selmer Amundson.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That, for purposes
of determining the entitlement of Selmer Amundson, of Albert Lea,
Minnesota, to disability insurance benefits under section 223 of the
Social Security Act (and to the establishment of a period of disability
under section 216(i) of such Act) on the basis of his wages and self-
employment income, the tax returns of the said Selmer Amundson's
self-employment income for the years 1964 through 1968 (which were
filed in 1971 following discovery of the wrongful failure of his account-
ant to file them when due) shall each be deemed to have been filed
before the expiration of the applicable time limitation as defined in
section 205(c) (1) (B) of such Act, and such self-employment income
shall accordingly be included in the records of the Secretary of Health,
Education, and Welfare as provided in section 205 (c) (4) (C) of such
Act.
SEC. 2. Section 218(p) (1) of the Social Security Act is amended
by inserting "Montana," immediately after "Maryland,".
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
December 19, 1974
Dear Mr. Director:
The following bills were received at the White
House on December 19th:
S.J. Res 234
8. 2838
S. 3578
x
S. 184
X
S. 3341
S. 3615
S. 194
X
S. 3397
H.R. 3538
V
S. 1283
X
S. 3418
H.R. 14401
X
S. 1357
x
S. 3489
x
H.R. 15912
Y
S. 2125
X
S. 3518
H.R. 16609
&
S. 2594
x
S. 3574
*
H.R. 16901
X
Please let the President have reports and
recommendations as to the approval of these
bills as soon as possible.
Sincerely,
Robert D. Linder
Chief Executive Clerk
The Nonorable Roy L. Ash
Director
Office of Management and Budget
Washington, D. C.