republic-os/legal/us/code/title-26/chapter-76/section-7436.md

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LegalText	26 U.S.C. § 7436	Proceedings for determination of employment status	us	united_states_code	code_section	26	INTERNAL REVENUE CODE	76	JUDICIAL PROCEEDINGS	7436	26 U.S.C. § 7436	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc26@119-100.zip	/us/usc/t26/s7436	data/legal/raw/us/code/title-26/usc26.xml	e2db48439499de3a942470f501a0f04cc10c32f42072c49b8776e3ce386942e8	a261f094809116f42a96648a3d5eee80fa010379d67412551c21dd5c900b27f4	c5ac5347b2490b03fe57d0f0fa641a78e1e3c2fe57afdb0c3e55bd71e014ac10	2026-07-04	official	legal us-code

26 U.S.C. § 7436 - Proceedings for determination of employment status

Text

(a) Creation of remedy If, in connection with an audit of any person, there is an actual controversy involving a determination by the Secretary as part of an examination that—

(1) one or more individuals performing services for such person are employees of such person for purposes of subtitle C, or

(2) such person is not entitled to the treatment under subsection (a) of section 530 of the Revenue Act of 1978 with respect to such an individual,

upon the filing of an appropriate pleading, the Tax Court may determine whether such a determination 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 decision 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 registered mail notice to the petitioner of a determination by the Secretary described in subsection (a), no proceeding may be initiated under this section with respect to such determination 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 proceeding (or of any individual holding a substantially 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 applicable 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 conducted under this subsection shall not be reviewed 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 sentence of subsection (a), and subsections (c), (d), and (e), of section 7463 shall apply to proceedings 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 Secretary’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.)

Notes

Editorial Notes

References in TextSection 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.

Prior ProvisionsA prior section 7436 was renumbered section 7437 of this title.

Amendments2000—Subsec. (a). Pub. L. 106–554 inserted “and the proper amount of employment tax under such determination” 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 AmendmentAmendment 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 AmendmentPub. 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 commenced after the date of the enactment of this Act [July 22, 1998].”