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written agreements, overseeing finances, collecting money owed to
petitioner, hiring and firing independent contractors, obtaining
clients, maintaining client relationships, and generally managing
petitioner’s business affairs.
During the period at issue, all payments made to petitioner
were deposited into petitioner’s checking account. Mr. Yeagle is
the only person with signature authority on petitioner’s bank
account. Petitioner did not make regular payments to Mr. Yeagle;
Mr. Yeagle withdrew money from petitioner’s bank account at his
discretion. Mr. Yeagle also paid personal expenses from
petitioner’s bank account at his discretion. Mr. Yeagle did not
receive any wages, salary, or tips from any other business entity,
or income from any other S corporation during 1995, 1996, and 1997.
During the period at issue, petitioner did not treat any
individual, including Mr. Yeagle, as an employee, and it did not
file a Form 941, Employer’s Quarterly Federal Tax Return, or a Form
940, Employer’s Annual Federal Unemployment Tax Return, for any
quarter during the period at issue. Petitioner treated individuals
who performed services for it, other than Mr. Yeagle, as
independent contractors and issued Forms 1099-MISC, Miscellaneous
Income, to those individuals. Petitioner did not issue a Form
1099-MISC or a Form W-2, Wage and Tax Statement, to Mr. Yeagle for
1995, 1996, or 1997.
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Last modified: May 25, 2011