Opting Out of Social Security

By Lee Bellinger / December 26, 2013

Yes, It Can Be Done –
If You’re Part of a “Recognized” Religion

Participation in Obamacare is actually voluntary – at least for some people who assert their limited rights as conscientious objectors. You may also have a right as an objector to prevent your children from being branded with a Social Security number or to exempt yourself from the Social Security tax.

Leading taxpayer rights advocate and frequent Independent Living contributing guest expert Dan Pilla wrote a groundbreaking feature story on this issue back in 2000. The article, “Social Security Numbers and Minor Children: IRS Admits Rights of Religious Objectors,” headlined the February 2000 edition of his Pilla Talks Taxes newsletter and brought to light a number.

Asserting Your First Amendment Rights

“The main claim in this fight is that the First Amendment prevents the IRS from denying one of the legal benefits to which he is otherwise entitled but for his religious objection,” Pilla wrote. “Grounded in this legal premise, we have ushered a number of cases through the system as a means of bringing judicial review upon this issue.”

A 1986 law requires that minor children have a Social Security number if their parents wish to claim them as dependents on their income tax return. After some legal wrangling, Dan noted that the IRS Office of Chief Counsel had finally released a Chief Counsel Memorandum acknowledging the right of religious objectors to protect their children from being assigned Social Security numbers. However, getting the agency to adhere to its own policies is another matter.

Many people have a religious (or secular) opposition to numbering their children. Because their objections are grounded in deep-seated, sincerely held opposition, the First Amendment protects their right to exercise those beliefs. But the government sometimes takes the bizarre position that First Amendment rights can only be fully enjoyed by Amish and Mennonites, who are specially granted legal exemption from the requirement to brand their children with Social Security numbers.

For years, people have struggled to assert their religious objections to Social Security numbers, sometimes successfully and sometimes unsuccessfully. The government has no constitutional authority to define what “religion” means for anyone or to pass judgment on the validity of anyone’s conscientious objection. The First Amendment does not grant special privileges to particular government-approved religions.

Therefore, if you have a conscientious objection, even if it’s not grounded in the doctrines of a particular religious denomination the government has heretofore recognized, you can go ahead and assert it. The IRS might then reject it because your objection is not based on a religious sect that it officially recognizes. At which point you can say you at least tried or press forward with appeals.

According to Dan Pilla, those with a conscientious objection should indicate it on the Form 1040 by writing “religious objector” in the space provided for the entry of the dependent’s Social Security number. Include IRS Form 8275 (Disclosure Statement) with the return. Use this form to identify your claim and prevent the IRS from penalizing you if it (arbitrarily) rejects your objection. To further bolster your claim, include a detailed affidavit which explains why you’re claiming “religious objector” status.

Becoming Exempt from the Tax

Even if you’ve successfully exempted your children from having a Social Security number, they may still owe Social Security taxes once they enter the workforce. To actually become exempt from Social Security taxes (and ineligible for benefits), you’ll need to file Form 4029.

Form 4029 isn’t prominently displayed by the IRS, isn’t widely known even among tax preparers, and is virtually inaccessible through the two leading tax software platforms (TurboTax and H&R Block at Home). The only major tax preparation software that prompts users to the potential for filing for an exemption to Social Security and Medicare taxes is TaxAct. (Another benefit to TaxAct: it’s cheaper than the competition.)

On Form 4029, you must be able to demonstrate that you’re part of a “recognized religious group” that is conscientiously opposed to compulsory government social insurance. Otherwise, the IRS will probably disallow your exemption request.

Granted, the idea of opting out of Social Security may not seem attractive to you if you’ve paid into it all your life and are close to collecting benefits. But for young people just entering a system that is headed toward insolvency in the decades ahead, it will almost certainly give them a raw deal. Opting out could be a very practical choice for a young person – and a moral one if dictated by conscience.


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