26 U.S.C. § 3509: Determination of employer’s liability for certain employment 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. 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. by substituting “3 percent” for “1.5 percent” in paragraph (1); and by substituting “40 percent” for “20 percent” in paragraph (2). For purposes of paragraph (1), the term “applicable requirements” means the requirements described in paragraph (1) which would be applicable consistent with the employer’s treatment of the employee as not being an employee for purposes of chapter 24 or subchapter A of chapter 21. This section shall not apply to the determination of the employer’s liability for tax under chapter 24 or subchapter A of chapter 21 if such liability is due to the employer’s intentional disregard of the requirement to deduct and withhold such tax. the employee’s liability for tax shall not be affected by the assessment or collection of the tax so determined, the employer shall not be entitled to recover from the employee any tax so determined, and section 3402(d) and section 6521 shall not apply. the employer deducted and withheld any amount of the tax imposed by chapter 24 on such wages, but failed to deduct and withhold the amount of the tax imposed by subchapter A of chapter 21 with respect to such wages. 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).