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Speltz fulfilled his contractual obligations under the accident
and health plan. We next determine whether Mr. Speltz was a bona
fide employee of the daycare.
Whether Mr. Speltz Was an Employee
Whether an employer-employee relationship exists is a
factual question. See Profl. & Executive Leasing, Inc. v.
Commissioner, 862 F.2d 751, 753 (9th Cir. 1988), affg. 89 T.C.
225 (1987); Air Terminal Cab, Inc. v. United States, 478 F.2d
575, 578 (8th Cir. 1973); Packard v. Commissioner, 63 T.C. 621,
629-630 (1975); see also Haeder v. Commissioner, T.C. Memo.
2001-7. Courts typically apply a common law agency test to
determine whether an employer-employee relationship exists. See,
e.g., Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323-324
(1992); Community for Creative Non-Violence v. Reid, 490 U.S.
730, 751-752 (1989); Matthews v. Commissioner, 92 T.C. 351, 360
(1989), affd. 907 F.2d 1173 (D.C. Cir. 1990). Moreover, where a
family relationship is involved, close scrutiny is required to
determine whether a bona fide employer-employee relationship
existed and whether payments were made on account of the
employer-employee relationship or on account of the family
relationship. See Denman v. Commissioner, 48 T.C. 439 (1967);
Haeder v. Commissioner, supra; Shelley v. Commissioner, T.C.
Memo. 1994-432; Martens v. Commissioner, T.C. Memo. 1990-42,
affd. without published opinion 934 F.2d 319 (4th Cir. 1991);
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