Social Security Tax Opt-out

[Kestrel]

Some years back, after I had been paying Social Security taxes for all my working life, I heard a certain fellow say there was a legal way for ordinary folks to opt out of the Social Security system and stop paying Social Security taxes. Now he specifically said he wasn't talking about exemptions for folks with covered by railroad or religious or certain state-sponsored alternative retirement systems. No, he claimed this was a legal opt-out that could be exercised by any Joe Work-a-day at any ordinary job.

I tried searching for the Social Security opt-out in the Quatloos forums but couldn't find it. In all the time since I met this fellow I have never heard anyone reliably claim the opt-out was real. After I got to know this fellow a little better I realized he's a well-intentioned likeable fool, but a still a fool anyway. Yet surely someone here has heard of this one??? Just where does this bulls--t come from???

Of course, he admitted there are a few constraints on the opt-out:

-- You have to find and fill out IRS form number (mumble). And you can get said form with its instructions from the IRS. But since the IRS and congress don't want anyone to actually file for the opt-out you won't find an indirect link to that form on their website. You have to already know exactly which form you're trying to find and query specifically for it.

-- If you do find the form, you then have to present it to your employer who has also never heard of the opt-out because it's not referenced in the Circular E or on any employer's payroll tax forms. Then you have to convince said employer that he won't get penalized for complying with it. And if you ever change jobs you have to convince each new employer of the same. But ultimately they have to accept it and comply.

-- As a condition of filing for the opt-put, you forever waive the right for you and your beneficiaries to collect Social Security benefits in your name, no matter how many years you have already paid in. The only way back in would be to withdraw the form and pay back the "missing" taxes (much like a late enrollee in Medicare has to do).

-- Finally, to further discourage anyone from opting-out, the IRS added a further constraint: You don't get back any of the social security tax ever paid by you or your employer up to the date you filed the form. For me this could basically be summarized: "sux to be you," since I had been working for way more than the qualifying minimum number of years by then.

So he concluded by saying I was probably better off staying in the system. But I could help others by spreading the word. And since he was younger and had less at risk than me he WAS indeed planning to do it.

I dismissed the whole idea at the time, but couldn't help shaking my head. I hope he never managed to convince his employers the opt-out was real.

So has anyone here ever heard of this Social Security tax opt-out?

[wserra]

I haven't heard of that particular fantasy, but I've heard of plenty of others. We call them "magical thinking" - perform the required incantations and wondrous things will happen.

BTW, a suggestion as to how to respond to the "the IRS and congress don't want anyone to find the form | learn the secret | sue under common law | pick up the kryptonite" - then why doesn't Congress do away with the form | secret | common law | kryptonite? Why bother to hide it if you can eliminate it? 'Course, this question may elicit a response as to secret constitutional provisions that don't permit this to happen. Eventually you come to "Mit der Dummheit kämpfen Götter selbst vergebens".

Schiller!

[Judge Roy Bean]

...
So has anyone here ever heard of this Social Security tax opt-out?

As a matter of fact, yes. My earliest recollection is from the '50s when the tax rates were being ratcheted up from the historical 2% to as high as 6% and the maximum taxable earnings rose from $3K to $4.8K in just ten years. During that era, hundreds of pieces of legislation were being introduced to "fix" things in SS as well as the Railroad Retirement and Civil Service programs.

Good old Senator Proxmire led the way to mislead the citizenry by trying to make the tax look like an insurance premium, knowing full well that older people were going to get more than they put in and younger people would probably not get all they put in over their working lives.

It was, as you depict, something that only certain people could use, and as I recall, it had something to do with you declaring you were covered by a program that exempted you, i.e., you were a former railroad worker.

Given the state of automation in that era, I would guess it would have taken years to find a discrepancy.








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[LPC]

There is a form that allows you to opt out of the social security system (Form 4029), but only if you're Amish, Mennonite, or a member of some other religious group that provides social welfare for its members and has religious objections to the social security system.

There's also a way for ministers and members of religious orders to elect out of the self-employment tax (Form 4361), once again subject to various conditions (including that the religious organization must have been in existence in 1950).

The idea that the social security system is voluntary for the general population is a persistent delusion, and can be found in various rantings on the Internet. However, I've never seen the claim that there is a super-secret form that you can file to opt out.

[Demosthenes]

This one is an oldie.

From the hard drive 'o Demo.

From: doylerobertronnie@home.com
Sent: Thursday, July 26, 2001 1:57 PM
To: zeroincomefilers@yahoogroups.com
Subject: [ZIF] SS6

Group,

I just learned from and unexpected source that one can opt out of Social Security legally using their form SS6. My source shared with me that one cannot obtain this form at a local Social Security office as they will treat you like you are crazy if you ask for this form and pretend that they have never heard of it. This source is getting the form by writing to the Government Printing Office in Pueblo, Colorado.

I look forward to using these forms as proselytizing tools!

Has anyone else heard of form SS6?

Doyle Jones

[Kestrel]

Super Secret Form SS6!!! That's the one. And the date on that Doyle Jones message is right; it was around 2001 or 2002 that my gullible acquaintance made his announcement. Thanks, Demo.

LPC, that was an interesting little essay. I missed finding that one myself. Ultimately skipping to the bottom I noted it was another missive from an idjut who claims the United States doesn't include the 50 United States for the purposes of defining taxable income. **sigh**

Your Honor Judge Bean, your point about automation in the 1950s is well stated. Making a similar phony exemption claim in the 2010s and hoping to stay undetected is a fool's errand.

I love the German, wserra. I think I'm going to hang that on my wall where the idjuts can stare at it uncomprehendingly.

[grixit]

Perhaps the next big thing will be trying to join the amish. Somehow i don't see the average soverun going for 10 hour outdoor workdays and no tv.