-16-
December 1989, FBO provided petitioner with a Form W-2 and withheld
Social Security tax from petitioner's income. This, in our
opinion, indicates that FBO intended to create an employer-employee
relationship. See, e.g., Juliard v. Commissioner, T.C. Memo. 1991-
230. Further, FBO Policy and Procedures Directives in effect
during the year under consideration provided that a personal
services contractor is not eligible for the foreign earned income
exclusion, and that overseas PSC's treat the contractor as an FBO
government employee for all purposes except retirement. And,
petitioner was advised by the December 12, 1989, FBO memorandum
that he should designate himself as an FBO employee on his 1989
return.
After considering all the facts and circumstances present in
this case, we conclude that petitioner was an FBO employee in 1989.
Therefore, petitioners are not entitled to the foreign earned
income exclusion under section 911(a) for such year.
To reflect the foregoing and respondent's concession,
Decision will be entered
under Rule 155.
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