Rev. Rul. 77-315

Advice has been requested concerning the filing of Form SS-15, Certificate Waiving Exemption from Taxes under the Federal Insurance Contributions Act, and a Form SS-15a, List to Accompany Certificate on Form SS-15, Waiving Exemption from Taxes Under the Federal Insurance Contributions Act, pursuant to section 3121(k) of the Act (chapter 21, subtitle C, Internal Revenue Code of 1954) in the situation described below.

A corporation was formed in 1960 as a nonprofit organization. The corporation was organized and has operated exclusively for charitable purposes described in section 501(c)(3) of the Code since its formation and at all times thereafter. In 1961 the corporation filed a Form SS-15 and a Form SS-15a signed by its employees. In 1976 the corporation filed an application for recognition of exemption from income tax as an organization described in section 501(c)(3) of the Code.

Section 3121(b)(8)(B) of the Federal Insurance Contributions Act excepts from the term employment service performed in the employ of a religious, charitable, educational, or other organization described in section 501(c)(3) of the Code which is exempt from income tax under section 501(a). However, pursuant to section 3121(k) of the Act and 31.3121(k)-1 of the Employment Tax Regulations the organization may elect to extend the social security coverage provisions to services performed by its employees by filing a Form SS-15 together with a Form SS-15a containing the signature, address, and social security account number, if any, of each employee who concurs in the filing. Individuals who are hired after the calendar quarter in which the Form SS-15 is filed are automatically covered without signing the Form SS-15a.

The question is whether the Form SS-15 filed in 1961 is void because the corporation did not file an application for recognition of exemption until 1976.

The Tax Reform Act of 1969 added, as a condition of exemption for certain organizations described in section 501(c)(3) of the Code and organized after October 9, 1969, a provision requiring notice to the Secretary that the organization is applying for recognition of exempt status. See section 508(a) and section 1.508-1(a)(2) of the Income Tax Regulations. On the other hand, any organization organized before October 10, 1969, and fitting the description contained in section 501(c)(3), is not required to meet those notice and application requirements.

In the instant case, the corporation was not required as a condition of exemption to file an application for recognition of section 501(c)(3) status, but did so on its own initiative in 1976. Because the corporation's purposes and activities met the requirements for exemption in 1960 and all subsequent years, it is immaterial when it first filed an application for recognition of exemption.

Accordingly, the Forms SS-15 and SS-15a filed by the corporation in 1961 were valid when filed and the corporation waived its right to exemption from the taxes imposed by the Federal Insurance Contributions Act at that time.