20 C.F.R. § 404.1053(d) (2). Neither the regulation, with its references to "hotels, boarding houses, or apartment houses," nor any of the generally reported cases dealing with this issue appear to contemplate the situation presented here: occupancy of a residence more or less in common by the claimant and another in connection with which the claimant provides minimal services beyond maintenance and the furnishing of normal utilities such as light and heat. The cases have uniformly dealt with a claimant whose income has been derived from the rental of several separate apartments in the real property in which the claimant also lives, Conklin v. Celebrezze, 319 F.2d 569 (7th Cir. 1963), or the ownership and management of an apartment building or complex. Delno v. Celebrezze, 347 F.2d 159 (9th Cir. 1975); Hudson v. Celebrezze, 220 F. Supp. 738 (E.D. N.C. 1963); Thorbus v. Hobby, 124 F. Supp. 868 (S.D. Cal. 1954), aff's sub nom., Folsom v. Foteet, 235 F.2d 937 (9th Cir. 1956). See also Maloney v. Celebrezze, 337 F.2d 231 (3d Cir. 1964) (management of office building); Braaksma v. Celebrezze, 246 F. Supp. 767 (S.D. Cal. 1965) (building and renting of houses). Moreover, in each of the cases in which it has been found that a claimant's rental income was not excludable because it arose from the conduct of a "trade or business," the claimant's activities in connection with the rental income fell within the test enunciated by McDowell v. Ribicoff, 292 F.2d 174, 178 (2d Cir.), cert. denied, 368 U.S. 919, 82 S.Ct. 240, 7 L.Ed. 2d 135 (1961): "The phrase 'trade or business' connotes something more than an act or course of activity engaged in for profit. . . . [lt] must refer not merely to Acts engaged in for profit, but to extensive activity over a substantial period of time during which the Taxpayer holds himself out as selling goods or services." Thus, in Conklin, supra, Thorbus, supra, and Delno, supra, each of the landlord/claimants provided substantial services, above and beyond normal maintenance and repair functions normally associated with ownership and leasing of property, to a number of tenants on a continuing basis. The thread running through each case is well stated in Thorbus, supra, 124 F. Supp. at 871 (emphasis original): "[The facts] can lead only to the conclusion that the plaintiff worked at this this apartment house, in addition to merely renting the rooms." In contrast to those cases, the claimant here rented only one room to one tenant in connection with which she performed relatively light services on a casual basis: somewhat irregular cooking, occasional cleaning and changing of linens, and perhaps some nursing assistance such as assistance in bathing and checking medication. Whether characterized as "nursing" or "maid" services in connection with the renting of the 'Although the plaintiff testified that she spent four to five hours each day rendering services to her patient, the record considered as a whole supports the factual conclusion that the services she supplied were as described in the text. room, these activities are not the "extensive activity over a substantial period of time" which amounts to a "trade or business." To be sure, the tenant here being somewhat incapacitated may have required special assistance from the plaintiff; nevertheless, the help he received, in substance was only slightly more than that which one person might ordinarily render to another who is living in the same residence. In short, it cannot be concluded here that the plaintiff "worked at" her trailer so as to lead to the conclusion that she was engaged in a "trade or business;"" her income was derived from her property, not her labor, and as such does not constitute self-employment income under 42 U.S.C.A. § 411. Cf. Delno v. Celebrezze, 347 F.2d 159, 161, § n.2 (9th Cir. 1965). The Secretary's decision is supported by substantial evidence, is correct as a matter of law, and is, therefore, affirmed. SELF-EMPLOYMENT INCOME SECTION 205(c) (42 U.S.C. 405(c)) SELF-EMPLOYMENT INCOME-CORRECTION OF EARNINGS RECORD AFTER EXPIRATION OF TIME LIMITATION 20 CFR 404.804 SSR 78-20c BLANCO v. SEC'Y H.E.W., (1977-1978 Transfer Binder) Unempl. Ins. Rep. 115,434 (E.D. Va 1976) The claimant inquired in 1970 as to the status of his Social Security earnings record. He was informed that he must file Income Tax returns for 1967 and 1968. Although he received the necessary tax forms in July 1970, he did not file self-employment tax returns until October 1972. Held, since the time limitation of 3years, 3-months and 15-days from the end of taxable years 1967 and 1968 had expired, the claimant's earnings record could not be credited with the self-employment income or the additional quarters of coverage required for entitlement to retirement benefits. WILLIAMS, District Judge: This section was brought by Plaintiff to review the "final decision" of the Secretary of Health, Education and Welfare pursuant to Section 205(g) of the Social Security Act, 42 U.S.C.A. §405(g). The sole issue before the Court is whether the Plaintiff has met the special earnings requirements of the Social Security Act for purposes of establishing eligibility for Retirement Insurance Benefits. It is agreed by both parties that Plaintiff is required to have twenty one quarter years of coverage to qualify for Retirement Insurance Benefits. Plaintiff pres ently has fifteen quarter years and both parties agree that if credit is given for 1967 and 1968, the years in question, Plaintiff would possess the requisite number of credits necessary to receive the benefits. Plaintiff first approached the Social Security District Office in Puerto Rico on October 25, 1968 and requested a copy of his earnings record. Such notification was sent in the mail to the plaintiff shortly thereafter. Plaintiff returned to the District Office in 1970 to apply for retirement at age 62, at which time he was informed that he must file Income Tax Returns for years including 1967 and 1968. Plaintiff claims that no one at the District Office explained to him that such returns were required to be filed within a certain time in order for earnings for those years to be credited. Plaintiff also claims that the Social Security information booklet, explaining in Spanish the necessary steps to follow in order to receive Retirement Insurance Benefits, made no mention of any time requirement. Plaintiff received the required tax forms from the Internal Revenue Service in July of 1970, but did not file the forms indicating self employment income for the years ending December 31, 1967-69 until October 29, 1972. This was apparently done in an effort to have the required number of quarters credited to his earnings record in order to become eligible for the benefits. Plaintiff's application for Retirement Age Benefits, however, was denied at the administrative level. Plaintiff requested a hearing on the matter, and on May 19, 1975 the hearing examiner rendered a decision denying Plaintiff's claim, finding that "the claimant is not now eligible to receive Retirement Insurance Benefits under the Social Security Act, because he has earned only 15 of the 21 quarter years of Social Security coverage he must have to be eligible." On October 20, 1975 the Appeals Council declined to overrule the hearing decision, and notified the plaintiff that the decision stood as the final decision of the Secretary in the case. 42 U.S.C.A. § 405(g) provides that "the findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive." See e.g., Richardson v. Perales, 402 U.S. 389, 410 (1971); Torphy v. Weinberger, 384 F. Supp. 1117 (E.D. Wisc. 1974); Hamlin v. Finch, 313 F. Supp. 1128 (W.D. Va 1970); Rodgers v. Cohen, 304 F. Supp. 91 (E.D. 1968). See also Sabbagha v. Celebrezze, 345 F.2d 509, 511 (4th Cir. 1965). However this Court is not so bound with respect to the Secretary's conclusions of law, and where the law has been misapplied the Court may properly correct the error below. See e.g., Conley v. Ribicoff, 294 F.2d 190, 194 (9th Cir. 1961); Torphy v. Weinberger, supra; Allen v. Richardson, 366 F. Supp. 316, 519 (E.D. Mich. 1973). Therefore the Secretary's findings may be over-ruled if he failed to use the correct legal standard in arriving at this conclusion. Hultzman v. Weinberger, 495 F.2d 1276, 1281 (3rd Cir. 1974); Torphy v. Weinberger, supra. The Secretary contends that because the statutory limitation has expired, he is without statutory authority to change in any way the records of Plaintiff regarding the number of quarter years earned. Section 205 of the Social Security Act, 42 U.S.C.A. § 405 not only governs the review of this action but it also sets out the applicable law. Social Security Act § 205(C) (2), 42 U.S.C.A. § 405(C) provides that the Secretary of Health, Education and Welfare is responsible for maintaining earnings records for each individual receiving self-employment income, and further provides in § 405(C) (3) that such records are, by stat ute, regarded as evidence on the question whether such earnings were in fact received during the period in question. But upon expiration of the Act's "time limitation" of three years, three months, and fifteen days set out in Section 205(c) (1) (B), 42 U.S.C.A. § 405(c) (1) (B) and 20 C.F.R. § 404.801 following each of the years in question, the Secretary's records become conclusive evidence on the question of receipt of covered self-employment earnings. Specifically, Section 205 of the Act, 42 U.S.C.A. § 405 provides in part: (c) (1) For the purposes of this subsection (B) The term 'time limitation' means a period of three years, (4) ***After the expiration of the time limitation following (C) the absence of an entry in the Secretary's records as to the (5) After the expiration of the time limitation following any (A) if an application for monthly benefits or for a lump-sum except that no amount of self-employment income of an in- taxable year) shall be included in the Secretary's records pursu- In Martlew v. Celebrezze, 320 F.2d 887 (5th Cir. 1963) the court summarized the statutory provisions regarding self-employment income by stating that "[t]o add self-employment income to his earnings record, claimant must show that he timely filed a tax return of his self-employment income." id. at 889. a Plaintiff in the present action failed to so file within the applicable time limitation of three years, three months and 15 days from the end of the years in question, 1967 and 1968. Therefore the Secretary is precluded from making any changes in his records which show no entry of self-employment income for such years. This was made very clear in Williams v. Celebrezze, 243 F. Supp. 103, 107 (E.D. Ark. 1965) when the court stated: With respect to wages, an absence of record entries during a quarter is after the expiration of the limitations period, presumptive evidence that no wages were received during that quarter. 42 U.S.C.A. § 405(c) (4) (B). This presumption would seem to be rebuttable, and perhaps it can be rebutted by any substantial evidence of earning during the quarter in question. With respect to self-employment income, however, an absence of record entries of such income with respect to a particular year is, after the expiration of the limitations period, conclusive evidence of the absence of such income unless it is shown that the claimant 'filed a tax return of his selfemployment income for such year before the expiration of the time limitation following such year ***. 42 U.S.C.A. § 405(c) (4) (C)." See also Breeden v. Weinberger, 493 F.2d 1002 (4th Cir. 1974) (dicta supporting "conclusive" as equivalent to statute of limitations); Crawford v. Cohen, 295 F. Supp. 624, 627 (D. S.C. 1969). Although it is unfortunate that Plaintiff in the immediate action is precluded by the terms of the statute from receiving benefits based in part on his earnings from 1967 and 1968, the orderly administration of Social Security Benefits by the Department of Health, Education and Welfare demands a reasonable time limitation for ending disputes about benefits. Lasch v. Richardson, 457 F.2d 435, 440 (7th Cir. 1972). See also Martlew v. Celebrezze, supra. Plaintiff contends, however, that the Social Security Office was negligent in not informing him that there was a statute of limitation when they sent him his earnings record that included no entry for the years 1967 and 1968. Plaintiff further asserts that he had no way of learning of the requirement that he file a tax return for social security 'The court in Williams went on to emphasize in footnote 6 on page 110 that: If self-employment income is not reflected on the Secretary's record within the limitations period, it simply cannot be considered unless the recipient of the income has shown it on a self-employment tax return filed within that period. |