{"identifier":"/us/usc/t26/s3509","title":26,"num":"\u00a7\u202f3509.","heading":"Determination of employer\u2019s liability for certain employment taxes","text":"\u00a7\u202f3509.\nDetermination of employer\u2019s liability for certain employment taxes\n(a)\nIn general\nIf any employer fails to deduct and withhold any tax under chapter 24 or subchapter A of chapter 21 with respect to any employee by reason of treating such employee as not being an employee for purposes of such chapter or subchapter, the amount of the employer\u2019s liability for\u2014\n(1)\nWithholding taxes\nTax under chapter 24 for such year with respect to such employee shall be determined as if the amount required to be deducted and withheld were equal to 1.5 percent of the wages (as defined in section 3401) paid to such employee.\n(2)\nEmployee social security tax\nTaxes under subchapter A of chapter 21 with respect to such employee shall be determined as if the taxes imposed under such subchapter were 20 percent of the amount imposed under such subchapter without regard to this subparagraph.\n(b)\nEmployer\u2019s liability increased where employer disregards reporting requirements\n(1)\nIn general\nIn the case of an employer who fails to meet the applicable requirements of section 6041(a), 6041A, or 6051 with respect to any employee, unless such failure is due to reasonable cause and not willful neglect, subsection (a) shall be applied with respect to such employee\u2014\n(A) by substituting \u201c3 percent\u201d for \u201c1.5 percent\u201d in paragraph (1); and\n(B) by substituting \u201c40 percent\u201d for \u201c20 percent\u201d in paragraph (2).\n(2)\nApplicable requirements\nFor purposes of paragraph (1), the term \u201capplicable requirements\u201d means the requirements described in paragraph (1) which would be applicable consistent with the employer\u2019s treatment of the employee as not being an employee for purposes of chapter 24 or subchapter A of chapter 21.\n(c)\nSection not to apply in cases of intentional dis\u00adregard\nThis section shall not apply to the determination of the employer\u2019s liability for tax under chapter 24 or subchapter A of chapter 21 if such liability is due to the employer\u2019s intentional disregard of the requirement to deduct and withhold such tax.\n(d)\nSpecial rules\nFor purposes of this section\u2014\n(1)\nDetermination of liability\nIf the amount of any liability for tax is determined under this section\u2014\n(A) the employee\u2019s liability for tax shall not be affected by the assessment or collection of the tax so determined,\n(B) the employer shall not be entitled to recover from the employee any tax so determined, and\n(C) section 3402(d) and section 6521 shall not apply.\n(2)\nSection not to apply where employer deducts wage but not social security taxes\nThis section shall not apply to any employer with respect to any wages if\u2014\n(A) the employer deducted and withheld any amount of the tax imposed by chapter 24 on such wages, but\n(B) failed to deduct and withhold the amount of the tax imposed by subchapter A of chapter 21 with respect to such wages.\n(3)\nSection not to apply to certain statutory employees\nThis section shall not apply to any tax under subchapter A of chapter 21 with respect to an individual described in subsection (d)(3) of section 3121 (without regard to whether such individual is described in paragraph (1) or (2) of such subsection).","url":"https://projectusc.org/usc/t26/s3509.html","content":[{"t":"sec","id":"/us/usc/t26/s3509","children":[{"t":"num","text":"\u00a7\u202f3509."},{"t":"heading","text":"Determination of employer\u2019s liability for certain employment taxes"},{"t":"subsec","id":"/us/usc/t26/s3509/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"If any employer fails to deduct and withhold any tax under chapter 24 or subchapter A of chapter 21 with respect to any employee by reason of treating such employee as not being an employee for purposes of such chapter or subchapter, the amount of the employer\u2019s liability for\u2014"},{"t":"para","id":"/us/usc/t26/s3509/a/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Withholding taxes"},{"t":"content","children":[{"t":"p","text":"Tax under chapter 24 for such year with respect to such employee shall be determined as if the amount required to be deducted and withheld were equal to 1.5 percent of the wages (as defined in section 3401) paid to such employee.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s3509/a/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Employee social security tax"},{"t":"content","children":[{"t":"p","text":"Taxes under subchapter A of chapter 21 with respect to such employee shall be determined as if the taxes imposed under such subchapter were 20 percent of the amount imposed under such subchapter without regard to this subparagraph.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s3509/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Employer\u2019s liability increased where employer disregards reporting requirements"},{"t":"para","id":"/us/usc/t26/s3509/b/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"In the case of an employer who fails to meet the applicable requirements of section 6041(a), 6041A, or 6051 with respect to any employee, unless such failure is due to reasonable cause and not willful neglect, subsection (a) shall be applied with respect to such employee\u2014"},{"t":"subpara","id":"/us/usc/t26/s3509/b/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" by substituting \u201c3 percent\u201d for \u201c1.5 percent\u201d in paragraph (1); and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s3509/b/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" by substituting \u201c40 percent\u201d for \u201c20 percent\u201d in paragraph (2).","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s3509/b/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Applicable requirements"},{"t":"content","children":[{"t":"p","text":"For purposes of paragraph (1), the term \u201capplicable requirements\u201d means the requirements described in paragraph (1) which would be applicable consistent with the employer\u2019s treatment of the employee as not being an employee for purposes of chapter 24 or subchapter A of chapter 21.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s3509/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Section not to apply in cases of intentional dis\u00adregard"},{"t":"content","children":[{"t":"p","text":"This section shall not apply to the determination of the employer\u2019s liability for tax under chapter 24 or subchapter A of chapter 21 if such liability is due to the employer\u2019s intentional disregard of the requirement to deduct and withhold such tax.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t26/s3509/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Special rules"},{"t":"chapeau","text":"For purposes of this section\u2014"},{"t":"para","id":"/us/usc/t26/s3509/d/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Determination of liability"},{"t":"chapeau","text":"If the amount of any liability for tax is determined under this section\u2014"},{"t":"subpara","id":"/us/usc/t26/s3509/d/1/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the employee\u2019s liability for tax shall not be affected by the assessment or collection of the tax so determined,","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s3509/d/1/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" the employer shall not be entitled to recover from the employee any tax so determined, and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s3509/d/1/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" section 3402(d) and section 6521 shall not apply.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s3509/d/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Section not to apply where employer deducts wage but not social security taxes"},{"t":"chapeau","text":"This section shall not apply to any employer with respect to any wages if\u2014"},{"t":"subpara","id":"/us/usc/t26/s3509/d/2/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" the employer deducted and withheld any amount of the tax imposed by chapter 24 on such wages, but","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t26/s3509/d/2/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" failed to deduct and withhold the amount of the tax imposed by subchapter A of chapter 21 with respect to such wages.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t26/s3509/d/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Section not to apply to certain statutory employees"},{"t":"content","children":[{"t":"p","text":"This section shall not apply to any tax under subchapter A of chapter 21 with respect to an individual described in subsection (d)(3) of section 3121 (without regard to whether such individual is described in paragraph (1) or (2) of such subsection).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}