## Facts

- Mary Smith (a fictitious designation used by the court) applied for Title II disability insurance benefits, alleging disability due to severe multiple sclerosis.
- The Social Security Administration denied Smith’s claim because her earnings record did not show enough quarters of coverage for insured status under the Social Security Act.
- Smith asserted she would satisfy insured status if self-employment income for 1983 and 1984 were credited to her Social Security earnings record.
- Smith had filed joint federal income tax returns for 1983 and 1984 with her husband, but those returns did not report her self-employment income.
- Smith alleged her husband was physically and emotionally abusive, controlled the family finances, did not allow her to review the original joint returns, and forced her to sign them under duress.
- After learning from the Secretary of Health and Human Services (Donna E. Shalala) that she lacked insured status, Smith sought to amend the 1983 and 1984 returns to report the omitted self-employment income and submitted the amended returns as proof of earnings.
- Smith conceded the amended returns were filed after the time limits set by the Social Security Act and regulations for correcting earnings records and crediting self-employment income.
- An Administrative Law Judge denied benefits on the ground that Smith was not insured; the Appeals Council denied review, making the ALJ’s decision the Secretary’s final decision.
- Smith filed a civil action under 42 U.S.C. § 405(g), asking the district court to apply equitable tolling and to require the Secretary to consider the late-filed amended returns when determining insured status.

## Issues

1. Whether the Social Security Act’s deadlines affecting the crediting of self-employment income and correction of earnings records may be subject to equitable tolling in a proper case.
2. Whether allegations that a claimant signed inaccurate joint tax returns under duress from an abusive spouse can justify equitable relief permitting consideration of amended returns filed after the statutory and regulatory deadlines.
3. Whether the Secretary’s insured-status determination could stand without further administrative proceedings applying the correct legal standard to Smith’s equitable-tolling claim.

## Decision

- The court held that federal limitations periods are generally subject to equitable tolling and that equitable tolling may be available in Social Security cases in unusual circumstances.
- The court did not award benefits and did not itself determine Smith’s insured status or definitively order that the amended returns be credited as earnings.
- The court remanded the matter to the Secretary for further proceedings consistent with the opinion so the agency could consider Smith’s equitable-tolling arguments and related factual allegations (including duress) in deciding whether her late proof of self-employment income could be considered.

## Legal Principles

- Federal statutes of limitation are ordinarily subject to equitable tolling unless Congress clearly indicates otherwise.
- Equitable tolling can apply in Social Security cases in extraordinary situations, including where a claimant is prevented from timely action by circumstances beyond the claimant’s control.
- A claimant’s allegations of coercion or duress that prevented accurate and timely tax reporting may warrant equitable consideration when statutory or regulatory deadlines would otherwise bar consideration of later-filed proof.
- In a 42 U.S.C. § 405(g) action, a district court reviews whether the Secretary applied the correct legal standards and may remand for additional administrative proceedings when the agency has not adequately addressed a material legal theory.
- On remand, the agency must develop and evaluate the relevant facts and apply the governing legal standard to determine whether equitable tolling or related relief is appropriate before resolving insured status.

## Conclusion

In *Smith v. Shalala*, the district court held that equitable tolling may apply to federal deadlines in Social Security matters and remanded to the Secretary for further proceedings because Smith’s allegations—that an abusive spouse forced her to sign inaccurate joint returns, leading to late amended returns offered to prove self-employment income—required administrative consideration under the proper equitable-tolling framework before insured status could be finally resolved.


Smith v. Shalala, 910 F. Supp. 152 (1995)