26 U.S.C. § 7436 — Proceedings for determination of employ-

Page 3898 TITLE 26—INTERNAL REVENUE CODE § 7436 (d) Period for bringing action Notwithstanding any other provision of law, an action to enforce liability created under this section may be brought without regard to the amount in controversy and may be brought only within 2 years after the date the actions cre- ating such liability would have been discovered by exercise of reasonable care. (e) Mandatory stay Upon a certification by the Commissioner or the Commissioner’s delegate that there is an on- going investigation or prosecution of the tax- payer, the district court before which an action under this section is pending shall stay all pro- ceedings with respect to such action pending the conclusion of the investigation or prosecution. (f) Crime-fraud exception Subsection (a) shall not apply to information conveyed to an attorney, certified public ac- countant, or enrolled agent for the purpose of perpetrating a fraud or crime. (Added Pub. L. 104–168, title XII, § 1203(a), July 30, 1996, 110 Stat. 1470.) Editorial Notes PRIOR PROVISIONS A prior section 7435 was renumbered 7437 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 104–168, title XII, § 1203(c), July 30, 1996, 110 Stat. 1471, provided that: ‘‘The amendments made by this section [enacting this section and renumbering former section 7435 as 7436 of this title] shall apply to actions after the date of the enactment of this Act [July 30, 1996].’’ § 7436. Proceedings for determination of employ- ment status (a) Creation of remedy If, in connection with an audit of any person, there is an actual controversy involving a deter- mination by the Secretary as part of an exam- ination that— (1) one or more individuals performing serv- ices for such person are employees of such per- son for purposes of subtitle C, or (2) such person is not entitled to the treat- ment under subsection (a) of section 530 of the Revenue Act of 1978 with respect to such an in- dividual, upon the filing of an appropriate pleading, the Tax Court may determine whether such a deter- mination by the Secretary is correct and the proper amount of employment tax under such determination. Any such redetermination by the Tax Court shall have the force and effect of a de- cision of the Tax Court and shall be reviewable as such. (b) Limitations (1) Petitioner A pleading may be filed under this section only by the person for whom the services are performed. (2) Time for filing action If the Secretary sends by certified or reg- istered mail notice to the petitioner of a de- termination by the Secretary described in sub- section (a), no proceeding may be initiated under this section with respect to such deter- mination unless the pleading is filed before the 91st day after the date of such mailing. (3) No adverse inference from treatment while action is pending If, during the pendency of any proceeding brought under this section, the petitioner changes his treatment for employment tax purposes of any individual whose employment status as an employee is involved in such pro- ceeding (or of any individual holding a sub- stantially similar position) to treatment as an employee, such change shall not be taken into account in the Tax Court’s determination under this section. (c) Small case procedures (1) In general At the option of the petitioner, concurred in by the Tax Court or a division thereof before the hearing of the case, proceedings under this section may (notwithstanding the provisions of section 7453) be conducted subject to the rules of evidence, practice, and procedure ap- plicable under section 7463 if the amount of employment taxes placed in dispute is $50,000 or less for each calendar quarter involved. (2) Finality of decisions A decision entered in any proceeding con- ducted under this subsection shall not be re- viewed in any other court and shall not be treated as a precedent for any other case not involving the same petitioner and the same determinations. (3) Certain rules to apply Rules similar to the rules of the last sen- tence of subsection (a), and subsections (c), (d), and (e), of section 7463 shall apply to pro- ceedings conducted under this subsection. (d) Special rules (1) Restrictions on assessment and collection pending action, etc. The principles of subsections (a), (b), (c), (d), and (f) of section 6213, section 6214(a), section 6215, section 6503(a), section 6512, and section 7481 shall apply to proceedings brought under this section in the same manner as if the Sec- retary’s determination described in subsection (a) were a notice of deficiency. (2) Awarding of costs and certain fees Section 7430 shall apply to proceedings brought under this section. (e) Employment tax The term ‘‘employment tax’’ means any tax imposed by subtitle C. (Added Pub. L. 105–34, title XIV, § 1454(a), Aug. 5, 1997, 111 Stat. 1055; amended Pub. L. 105–206, title III, § 3103(b)(1), July 22, 1998, 112 Stat. 731; Pub. L. 106–554, § 1(a)(7) [title III, § 314(f)], Dec. 21, 2000, 114 Stat. 2763, 2763A–643.) Editorial Notes REFERENCES IN TEXT Section 530 of the Revenue Act of 1978, referred to in subsec. (a)(2), is section 530 of Pub. L. 95–600, which is set out as a note under section 3401 of this title. Page 3899 TITLE 26—INTERNAL REVENUE CODE § 7437 PRIOR PROVISIONS A prior section 7436 was renumbered section 7437 of this title. AMENDMENTS 2000—Subsec. (a). Pub. L. 106–554 inserted ‘‘and the proper amount of employment tax under such deter- mination’’ before period at end of first sentence. 1998—Subsec. (c)(1). Pub. L. 105–206 substituted ‘‘$50,000’’ for ‘‘$10,000’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2000 AMENDMENT Amendment by Pub. L. 106–554 effective as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 1(a)(7) [title III, § 314(g)] of Pub. L. 106–554, set out as a note under section 56 of this title. EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–206, title III, § 3103(c), July 22, 1998, 112 Stat. 731, provided that: ‘‘The amendments made by this section [amending this section and sections 7443A and 7463 of this title] shall apply to proceedings com- menced after the date of the enactment of this Act [July 22, 1998].’’ § 7437. Cross references (1) For determination of amount of any tax, addi- tions to tax, etc., in title 11 cases, see section 505 of title 11 of the United States Code. (2) For exclusion of tax liability from discharge in cases under title 11 of the United States Code, see section 523 of such title 11. (3) For recognition of tax liens in cases under title 11 of the United States Code, see sections 545 and 724 of such title 11. (4) For collection of taxes in connection with plans for individuals with regular income in cases under title 11 of the United States Code, see section 1328 of such title 11. (5) For provisions permitting the United States to be made party defendant in a proceeding in a State court for the foreclosure of a lien upon real estate where the United States may have claim upon the premises involved, see section 2410 of Title 28 of the United States Code. (6) For priority of lien of the United States in case of insolvency, see section 3713(a) of title 31, United States Code. (7) For interest on judgments for overpayments, see section 2411(a) of Title 28 of the United States Code. (8) For review of a Tax Court decision, see section 7482. (9) For statute prohibiting suits to replevy prop- erty taken under revenue laws, see section 2463 of Title 28 of the United States Code. (Aug. 16, 1954, ch. 736, 68A Stat. 878, § 7425; re- numbered § 7427, Pub. L. 89–719, title I, § 109, Nov. 2, 1966, 80 Stat. 1141; renumbered § 7428, and amended Pub. L. 94–455, title XII, § 1203(b)(2)(A), title XIX, § 1906(a)(45), Oct. 4, 1976, 90 Stat. 1690, 1830; renumbered § 7430, Pub. L. 94–455, title XIII, § 1306(a), Oct. 4, 1976, 90 Stat. 1717; Pub. L. 96–589, § 6(d)(1), (i)(13), Dec. 24, 1980, 94 Stat. 3408, 3411; renumbered § 7431, Pub. L. 97–248, title II, § 292(a), Sept. 3, 1982, 96 Stat. 572; renumbered § 7432, Pub. L. 97–248, title III, § 357(a), Sept. 3, 1982, 96 Stat. 645; Pub. L. 97–258, § 3(f)(14), Sept. 13, 1982, 96 Stat. 1065; renumbered § 7434, Pub. L. 100–647, title VI, §§ 6240(a), 6241(a), Nov. 10, 1988, 102 Stat. 3746, 3747; renumbered § 7435, Pub. L. 104–168, title VI, § 601(a), July 30, 1996, 110 Stat. 1462; renum- bered § 7436, Pub. L. 104–168, title XII, § 1203(a), July 30, 1996, 110 Stat. 1470; renumbered § 7437, Pub. L. 105–34, title XIV, § 1454(a), Aug. 5, 1997, 111 Stat. 1055.) Editorial Notes AMENDMENTS 1982—Par. (6). Pub. L. 97–258 substituted ‘‘section 3713(a) of title 31, United States Code’’ for ‘‘R.S. 3466 (31 U.S.C. 191)’’. Notwithstanding the directory language that amendment be made to section 7430, the amend- ment was executed to this section to reflect the prob- able intent of Congress and the intervening renum- bering of section 7430 as 7432 by Pub. L. 97–248. 1980—Par. (1). Pub. L. 96–589, § 6(d)(1), added par. (1). Former par. (1), which provided cross reference to former section 35 of title 11 for exclusion of tax liabil- ity from discharge in bankruptcy, was struck out. Par. (2). Pub. L. 96–589, § 6(d)(1), (i)(13), added par. (2). Former par. (2), which provided cross reference to former section 93 of title 11 for limit on amount al- lowed in bankruptcy proceedings on debts owing to the United States, was struck out. Par. (3). Pub. L. 96–589, § 6(d)(1), (i)(13), added par. (3). Former par. (3), which provided cross reference to former section 107 of title 11 for recognition of tax liens in proceedings under the Bankruptcy Act, was struck out. Par. (4). Pub. L. 96–589, § 6(d)(1), (i)(13), added par. (4). Former par. (4), which provided for cross reference to former section 1080 of title 11 for collection of taxes in connection with wage earners’ plans in bankruptcy courts, was struck out. 1976—Par. (1). Pub. L. 94–455, § 1906(a)(45)(A), struck out ‘‘52 Stat. 851;’’ before ‘‘11 U.S.C. 35’’. Par. (2). Pub. L. 94–455, § 1906(a)(45)(B), struck out ‘‘52 Stat. 867;’’ before ‘‘11 U.S.C. 93’’. Par. (3). Pub. L. 94–455, § 1906(a)(45)(C), struck out ‘‘52 Stat. 876–877;’’ before ‘‘11 U.S.C. 107’’. Par. (4). Pub. L. 94–455, § 1906(a)(45)(D), struck out ‘‘52 Stat. 938;’’ before ‘‘11 U.S.C. 1080’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–589 effective Oct. 1, 1979, but not applicable to proceedings under Title 11, Bank- ruptcy, commenced before Oct. 1, 1979, see section 7(e) of Pub. L. 96–589, set out as a note under section 108 of this title. Subchapter C—The Tax Court Part I. Organization and jurisdiction. II. Procedure. III. Miscellaneous provisions. IV. Declaratory judgments. Editorial Notes AMENDMENTS 1976—Pub. L. 94–455, title X, § 1042(d)(2)(F), Oct. 4, 1976, 90 Stat. 1639, struck out in item relating to part IV ‘‘re- lating to qualification of certain retirement plans’’ after ‘‘Declaratory judgments’’. 1974—Pub. L. 93–406, title II, § 1041(c), Sept. 2, 1974, 88 Stat. 951, inserted item relating to part IV. PART I—ORGANIZATION AND JURISDICTION Sec. 7441. Status. 7442. Jurisdiction. 7443. Membership. 7443A. Special trial judges.