TITLE 26 - US CODE - CHAPTER 25 - GENERAL PROVISIONS RELATING TO EMPLOYMENT TAXES

26 USC 3501 - Collection and payment of taxes

(a) General rule 
The taxes imposed by this subtitle shall be collected by the Secretary and shall be paid into the Treasury of the United States as internal-revenue collections.
(b) Taxes with respect to non-cash fringe benefits 
The taxes imposed by this subtitle with respect to non-cash fringe benefits shall be collected (or paid) by the employer at the time and in the manner prescribed by the Secretary by regulations.

26 USC 3502 - Nondeductibility of taxes in computing taxable income

(a) The taxes imposed by section 3101 of chapter 21, and by sections 3201 and 3211 of chapter 22 shall not be allowed as a deduction to the taxpayer in computing taxable income under subtitle A.
(b) The tax deducted and withheld under chapter 24 shall not be allowed as a deduction either to the employer or to the recipient of the income in computing taxable income under subtitle A.

26 USC 3503 - Erroneous payments

Any tax paid under chapter 21 or 22 by a taxpayer with respect to any period with respect to which he is not liable to tax under such chapter shall be credited against the tax, if any, imposed by such other chapter upon the taxpayer, and the balance, if any, shall be refunded.

26 USC 3504 - Acts to be performed by agents

In case a fiduciary, agent, or other person has the control, receipt, custody, or disposal of, or pays the wages of an employee or group of employees, employed by one or more employers, the Secretary, under regulations prescribed by him, is authorized to designate such fiduciary, agent, or other person to perform such acts as are required of employers under this title and as the Secretary may specify. Except as may be otherwise prescribed by the Secretary, all provisions of law (including penalties) applicable in respect of an employer shall be applicable to a fiduciary, agent, or other person so designated but, except as so provided, the employer for whom such fiduciary, agent, or other person acts shall remain subject to the provisions of law (including penalties) applicable in respect of employers.

26 USC 3505 - Liability of third parties paying or providing for wages

(a) Direct payment by third parties 
For purposes of sections 3102, 3202, 3402, and 3403, if a lender, surety, or other person, who is not an employer under such sections with respect to an employee or group of employees, pays wages directly to such an employee or group of employees, employed by one or more employers, or to an agent on behalf of such employee or employees, such lender, surety, or other person shall be liable in his own person and estate to the United States in a sum equal to the taxes (together with interest) required to be deducted and withheld from such wages by such employer.
(b) Personal liability where funds are supplied 
If a lender, surety, or other person supplies funds to or for the account of an employer for the specific purpose of paying wages of the employees of such employer, with actual notice or knowledge (within the meaning of section 6323 (i)(1)) that such employer does not intend to or will not be able to make timely payment or deposit of the amounts of tax required by this subtitle to be deducted and withheld by such employer from such wages, such lender, surety, or other person shall be liable in his own person and estate to the United States in a sum equal to the taxes (together with interest) which are not paid over to the United States by such employer with respect to such wages. However, the liability of such lender, surety, or other person shall be limited to an amount equal to 25 percent of the amount so supplied to or for the account of such employer for such purpose.
(c) Effect of payment 
Any amounts paid to the United States pursuant to this section shall be credited against the liability of the employer.

26 USC 3506 - Individuals providing companion sitting placement services

(a) In general 
For purposes of this subtitle, a person engaged in the trade or business of putting sitters in touch with individuals who wish to employ them shall not be treated as the employer of such sitters (and such sitters shall not be treated as employees of such person) if such person does not pay or receive the salary or wages of the sitters and is compensated by the sitters or the persons who employ them on a fee basis.
(b) Definition 
For purposes of this section, the term sitters means individuals who furnish personal attendance, companionship, or household care services to children or to individuals who are elderly or disabled.
(c) Regulations 
The Secretary shall prescribe such regulations as may be necessary to carry out the purpose of this section.

26 USC 3507 - Advance payment of earned income credit

(a) General rule 
Except as otherwise provided in this section, every employer making payment of wages to an employee with respect to whom an earned income eligibility certificate is in effect shall, at the time of paying such wages, make an additional payment to such employee equal to such employees earned income advance amount.
(b) Earned income eligibility certificate 
For purposes of this title, an earned income eligibility certificate is a statement furnished by an employee to the employer which
(1) certifies that the employee will be eligible to receive the credit provided by section 32 for the taxable year,
(2) certifies that the employee has 1 or more qualifying children (within the meaning of section 32 (c)(3)) for such taxable year,
(3) certifies that the employee does not have an earned income eligibility certificate in effect for the calendar year with respect to the payment of wages by another employer, and
(4) states whether or not the employees spouse has an earned income eligibility certificate in effect.

For purposes of this section, a certificate shall be treated as being in effect with respect to a spouse if such a certificate will be in effect on the first status determination date following the date on which the employee furnishes the statement in question.

(c) Earned income advance amount 

(1) In general 
For purposes of this title, the term earned income advance amount means, with respect to any payroll period, the amount determined
(A) on the basis of the employees wages from the employer for such period, and
(B) in accordance with tables prescribed by the Secretary.

In the case of an employee who is a member of the Armed Forces of the United States, the earned income advance amount shall be determined by taking into account such employees earned income as determined for purposes of section 32.

(2) Advance amount tables 
The tables referred to in paragraph (1)(B)
(A) shall be similar in form to the tables prescribed under section 3402 and, to the maximum extent feasible, shall be coordinated with such tables, and
(B) if the employee is not married, or if no earned income eligibility certificate is in effect with respect to the spouse of the employee, shall treat the credit provided by section 32 as if it were a credit
(i) of not more than 60 percent of the credit percentage in effect under section 32 (b)(1) for an eligible individual with 1 qualifying child and with earned income not in excess of the earned income amount in effect under section 32 (b)(2) for such an eligible individual, which
(ii) phases out at 60 percent of the phaseout percentage in effect under section 32 (b)(1) for such an eligible individual between the phaseout amount in effect under section 32 (b)(2) for such an eligible individual and the amount of earned income at which the credit under section 32 (a) phases out for such an eligible individual, or
(C) if an earned income eligibility certificate is in effect with respect to the spouse of the employee, shall treat the credit as if it were a credit determined under subparagraph (B) by substituting 1/2 of the amounts of earned income described in such subparagraph for such amounts.
(d) Payments to be treated as payments of withholding and FICA taxes 

(1) In general 
For purposes of this title, payments made by an employer under subsection (a) to his employees for any payroll period
(A) shall not be treated as the payment of compensation, and
(B) shall be treated as made out of
(i) amounts required to be deducted and withheld for the payroll period under section 3401 (relating to wage withholding), and
(ii) amounts required to be deducted for the payroll period under section 3102 (relating to FICA employee taxes), and
(iii) amounts of the taxes imposed for the payroll period under section 3111 (relating to FICA employer taxes),

as if the employer had paid to the Secretary, on the day on which the wages are paid to the employees, an amount equal to such payments.

(2) Advance payments exceed taxes due 
In the case of any employer, if for any payroll period the aggregate amount of earned income advance payments exceeds the sum of the amounts referred to in paragraph (1)(B), each such advance payment shall be reduced by an amount which bears the same ratio to such excess as such advance payment bears to the aggregate amount of all such advance payments.
(3) Employer may make full advance payments 
The Secretary shall prescribe regulations under which an employer may elect (in lieu of any application of paragraph (2))
(A) to pay in full all earned income advance amounts, and
(B) to have additional amounts paid by reason of this paragraph treated as the advance payment of taxes imposed by this title.
(4) Failure to make advance payments 
For purposes of this title (including penalties), failure to make any advance payment under this section at the time provided therefor shall be treated as the failure at such time to deduct and withhold under chapter 24 an amount equal to the amount of such advance payment.
(e) Furnishing and taking effect of certificates 
For purposes of this section
(1) When certificate takes effect 

(A) First certificate furnished 
An earned income eligibility certificate furnished the employer in cases in which no previous such certificate had been in effect for the calendar year shall take effect as of the beginning of the first payroll period ending, or the first payment of wages made without regard to a payroll period, on or after the date on which such certificate is so furnished (or if later, the first day of the calendar year for which furnished).
(B) Later certificate 
An earned income eligibility certificate furnished the employer in cases in which a previous such certificate had been in effect for the calendar year shall take effect with respect to the first payment of wages made on or after the first status determination date which occurs at least 30 days after the date on which such certificate is so furnished, except that at the election of the employer such certificate may be made effective with respect to any payment of wages made on or after the date on which such certificate is so furnished. For purposes of this section, the term status determination date means January 1, May 1, July 1, and October 1 of each year.
(2) Period during which certificate remains in effect 
An earned income eligibility certificate which takes effect under this section for any calendar year shall continue in effect with respect to the employee during such calendar year until revoked by the employee or until another such certificate takes effect under this section.
(3) Change of status 

(A) Requirement to revoke or furnish new certificate 
If, after an employee has furnished an earned income eligibility certificate under this section, there has been a change of circumstances which has the effect of
(i) making the employee ineligible for the credit provided by section 32 for the taxable year, or
(ii) causing an earned income eligibility certificate to be in effect with respect to the spouse of the employee,

the employee shall, within 10 days after such change in circumstances, furnish the employer with a revocation of such certificate or with a new certificate (as the case may be). Such a revocation (or such a new certificate) shall take effect under the rules provided by paragraph (1)(B) for a later certificate and shall be made in such form as the Secretary shall by regulations prescribe.

(B) Certificate no longer in effect 
If, after an employee has furnished an earned income eligibility certificate under this section which certifies that such a certificate is in effect with respect to the spouse of the employee, such a certificate is no longer in effect with respect to such spouse, then the employee may furnish the employer with a new earned income eligibility certificate.
(4) Form and contents of certificate 
Earned income eligibility certificates shall be in such form and contain such other information as the Secretary may by regulations prescribe.
(5) Taxable year defined 
The term taxable year means the last taxable year of the employee under subtitle A beginning in the calendar year in which the wages are paid.
(f) Internal Revenue Service notification 
The Internal Revenue Service shall take such steps as may be appropriate to ensure that taxpayers who have 1 or more qualifying children and who receive a refund of the credit under section 32 are aware of the availability of earned income advance amounts under this section.

26 USC 3508 - Treatment of real estate agents and direct sellers

(a) General rule 
For purposes of this title, in the case of services performed as a qualified real estate agent or as a direct seller
(1) the individual performing such services shall not be treated as an employee, and
(2) the person for whom such services are performed shall not be treated as an employer.
(b) Definitions 
For purposes of this section
(1) Qualified real estate agent 
The term qualified real estate agent means any individual who is a sales person if
(A) such individual is a licensed real estate agent,
(B) substantially all of the remuneration (whether or not paid in cash) for the services performed by such individual as a real estate agent is directly related to sales or other output (including the performance of services) rather than to the number of hours worked, and
(C) the services performed by the individual are performed pursuant to a written contract between such individual and the person for whom the services are performed and such contract provides that the individual will not be treated as an employee with respect to such services for Federal tax purposes.
(2) Direct seller 
The term direct seller means any person if
(A) such person
(i) is engaged in the trade or business of selling (or soliciting the sale of) consumer products to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis which the Secretary prescribes by regulations, for resale (by the buyer or any other person) in the home or otherwise than in a permanent retail establishment,
(ii) is engaged in the trade or business of selling (or soliciting the sale of) consumer products in the home or otherwise than in a permanent retail establishment, or
(iii) is engaged in the trade or business of the delivering or distribution of newspapers or shopping news (including any services directly related to such trade or business),
(B) substantially all the remuneration (whether or not paid in cash) for the performance of the services described in subparagraph (A) is directly related to sales or other output (including the performance of services) rather than to the number of hours worked, and
(C) the services performed by the person are performed pursuant to a written contract between such person and the person for whom the services are performed and such contract provides that the person will not be treated as an employee with respect to such services for Federal tax purposes.
(3) Coordination with retirement plans for self­employed 
This section shall not apply for purposes of subtitle A to the extent that the individual is treated as an employee under section 401 (c)(1) (relating to self-employed individuals).

26 USC 3509 - Determination of employers liability for certain employment taxes

(a) In general 
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 employers liability for
(1) Withholding taxes 
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.
(2) Employee social security tax 
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.
(b) Employer’s liability increased where employer disregards reporting requirements 

(1) In general 
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
(A) by substituting 3 percent for 1.5 percent in paragraph (1); and
(B) by substituting 40 percent for 20 percent in paragraph (2).
(2) Applicable requirements 
For purposes of paragraph (1), the term applicable requirements means the requirements described in paragraph (1) which would be applicable consistent with the employers treatment of the employee as not being an employee for purposes of chapter 24 or subchapter A of chapter 21.
(c) Section not to apply in cases of intentional dis­regard 
This section shall not apply to the determination of the employers liability for tax under chapter 24 or subchapter A of chapter 21 if such liability is due to the employers intentional disregard of the requirement to deduct and withhold such tax.
(d) Special rules 
For purposes of this section
(1) Determination of liability 
If the amount of any liability for tax is determined under this section
(A) the employees liability for tax shall not be affected by the assessment or collection of the tax so determined,
(B) the employer shall not be entitled to recover from the employee any tax so determined, and
(C) sections[1] 3402(d) and section 6521 shall not apply.
(2) Section not to apply where employer deducts wage but not social security taxes 
This section shall not apply to any employer with respect to any wages if
(A) the employer deducted and withheld any amount of the tax imposed by chapter 24 on such wages, but
(B) failed to deduct and withhold the amount of the tax imposed by subchapter A of chapter 21 with respect to such wages.
(3) Section not to apply to certain statutory employees 
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).
[1] So in original. Probably should be “section”.

26 USC 3510 - Coordination of collection of domestic service employment taxes with collection of income taxes

(a) General rule 
Except as otherwise provided in this section
(1) returns with respect to domestic service employment taxes shall be made on a calendar year basis,
(2) any such return for any calendar year shall be filed on or before the 15th day of the fourth month following the close of the employers taxable year which begins in such calendar year, and
(3) no requirement to make deposits (or to pay installments under section 6157) shall apply with respect to such taxes.
(b) Domestic service employment taxes subject to estimated tax provisions 

(1) In general 
Solely for purposes of section 6654, domestic service employment taxes imposed with respect to any calendar year shall be treated as a tax imposed by chapter 2 for the taxable year of the employer which begins in such calendar year.
(2) Employers not otherwise required to make estimated payments 
Paragraph (1) shall not apply to any employer for any calendar year if
(A) no credit for wage withholding is allowed under section 31 to such employer for the taxable year of the employer which begins in such calendar year, and
(B) no addition to tax would (but for this section) be imposed under section 6654 for such taxable year by reason of section 6654 (e).
(3) Annualization 
Under regulations prescribed by the Secretary, appropriate adjustments shall be made in the application of section 6654 (d)(2) in respect of the amount treated as tax under paragraph (1).
(4) Transitional rule 
In the case of any taxable year beginning before January 1, 1998, no addition to tax shall be made under section 6654 with respect to any underpayment to the extent such underpayment was created or increased by this section.
(c) Domestic service employment taxes 
For purposes of this section, the term domestic service employment taxes means
(1) any taxes imposed by chapter 21 or 23 on remuneration paid for domestic service in a private home of the employer, and
(2) any amount withheld from such remuneration pursuant to an agreement under section 3402 (p).

For purposes of this subsection, the term domestic service in a private home of the employer includes domestic service described in section 3121 (g)(5).

(d) Exception where employer liable for other employment taxes 
To the extent provided in regulations prescribed by the Secretary, this section shall not apply to any employer for any calendar year if such employer is liable for any tax under this subtitle with respect to remuneration for services other than domestic service in a private home of the employer.
(e) General regulatory authority 
The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section. Such regulations may treat domestic service employment taxes as taxes imposed by chapter 1 for purposes of coordinating the assessment and collection of such employment taxes with the assessment and collection of domestic employers income taxes.
(f) Authority to enter into agreements to collect State unemployment taxes 

(1) In general 
The Secretary is hereby authorized to enter into an agreement with any State to collect, as the agent of such State, such States unemployment taxes imposed on remuneration paid for domestic service in a private home of the employer. Any taxes to be collected by the Secretary pursuant to such an agreement shall be treated as domestic service employment taxes for purposes of this section.
(2) Transfers to State account 
Any amount collected under an agreement referred to in paragraph (1) shall be transferred by the Secretary to the account of the State in the Unemployment Trust Fund.
(3) Subtitle F made applicable 
For purposes of subtitle F, any amount required to be collected under an agreement under paragraph (1) shall be treated as a tax imposed by chapter 23.
(4) State 
For purposes of this subsection, the term State has the meaning given such term by section 3306 (j)(1).