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Menapace v. Colvin

United States District Court, D. Massachusetts

January 27, 2016

CAROLYN W. COLVIN, Commissioner of Social Security, Defendant.


PATTI B. SARIS, Chief District Judge.


Plaintiff Robert Menapace has moved to reverse the final decision of the Commissioner of the Social Security Administration (Commissioner) denying his request to amend his earnings record to include self-employment income for 2004. The Commissioner has moved to affirm her ruling that Menapace cannot rely on his tax return to establish self-employment income because it was not timely filed. For the reasons set forth below, the Court DENIES Plaintiff's motion to reverse the Commissioner's decision (Docket No. 21), and ALLOWS Defendant's motion to affirm the Commissioner's decision (Docket No. 26).


In 2004, Menapace worked as an independent contractor and earned self-employment income. On April 15, 2005, Menapace filed a Form 4868, "Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, " and included a check for $5, 500 to pay his estimated 2004 tax liability. (R. 27). Menapace did not file a Form 1040 tax return at that time.

On March 17, 2008, the Internal Revenue Service (IRS) notified Menapace that it had no record of receiving a tax return from him for the 2004 tax year. The IRS notice stated that Menapace had "three years from the due date of the return, plus extensions" to file his tax return. (R. 28). Menapace filed his 2004 tax return on August 15, 2008, within the IRS deadline.[1] After filing his tax return, he received a refund of $2, 648.00.

On February 10, 2009, Menapace received a statement from the Social Security Administration (SSA) stating that his earnings record did not include self-employment income for 2004. A claimant's earnings record is used to determine his eligibility for Social Security benefits, and, if eligible, the amount of the monthly payment. Because Menapace had paid his taxes and filed a tax return with the IRS for the 2004 tax year, he disputed the SSA's exclusion of his 2004 self-employment income.


After reviewing his earnings record, the SSA notified Menapace on February 19, 2012, that his SSA earnings record would not include self-employment income for 2004 because the claimant failed to file his tax return within the prescribed period under 42 U.S.C. § 405(c), which ended on April 15, 2008. Menapace requested a reconsideration, and the SSA affirmed its decision on September 25, 2012. The SSA concluded that, although Menapace had filed a tax return for 2004, he had filed the return after the three years, three months, and fifteen days statutory time limitation under 42 U.S.C. § 405(c). Because none of the listed exceptions applied that would have allowed Menapace to rely on his 2004 tax return, the SSA would not include any 2004 self-employment income in his earnings record.

Menapace requested a hearing before an Administrative Law Judge (ALJ), who held the hearing on December 6, 2013, in Boston, Massachusetts. The ALJ reversed the SSA's determination on the ground that Menapace had established "good cause" under 42 U.S.C. § 403(l) for the untimely filing of his tax return because the "claimant had good cause to believe if he filed his return in a timely fashion as per the IRS guideline after making timely payments for the tax year that he would be credited for his self-employment by the administration." (R. 15). The ALJ also pointed out that the claimant paid his taxes in a timely manner and had "no notice that his return had to be filed sooner than required by the IRS in order to be credited by the Social Security Administration." (R. 15).

The SSA requested a review of the ALJ's decision, and on June 20, 2014, the Social Security Appeals Council reversed the ALJ's order. The Appeals Council found that the ALJ based his decision on incorrect legal principles because the "good cause" exception was not relevant to the correction of an individual's earnings record under 42 U.S.C. § 405(c). After a request for further review, the Appeals Council affirmed its decision and denied the inclusion of self-employment income for 2004 in Menapace's earnings record. The decision of the Appeals Council is the final decision of the Commissioner.

Menapace appealed to this Court under 42 U.S.C. § 405(g), which permits judicial review of "any final decision of the Commissioner of Social Security made after a hearing to which [the plaintiff] was a party, irrespective of the amount in controversy."


I. Appeals Council ...

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