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Cir. 1984). As a result, this Court applies a two-prong test to
determine whether a corporation or its employee is the actual
earner of the income in question:
First, the service-performer employee must be just
that--an employee of the corporation whom the corpora-
tion has the right to direct or control in some mean-
ingful sense. Second, there must exist between the
corporation and the person or entity using the services
a contract or similar indicium recognizing the corpora-
tion's controlling position. [Id.; citations omitted.]
With respect to the first prong of the foregoing test,
although Mr. Hardtke was an employee of Dinan during 1987, he
also was an employee of Agency during that year. Thus, not only
Dinan, but also Agency, had the right to control or direct Mr.
Hardtke in some meaningful sense as its employee.
With respect to the second prong of the test set forth in
the Johnson case, we find that petitioners failed to prove that a
contract existed between Dinan and Agency during 1987 under which
Dinan was to provide its services to Agency through its employee,
Mr. Hardtke. Except possibly for the minutes of the March 3,
1987 Agency board meeting, the only evidence of the existence of
such an agreement between Dinan and Agency is the self-serving
testimony of Mr. Hardtke on which we are unwilling to rely.
With respect to the March 3, 1987 Agency board minutes, they
provide in pertinent part:
Compensation will be earned by Mr. Hardtke and Mr.
Michell and shall be paid directly to Dinan, Inc. as
follows:
$7,000.00 each month is payable to Dinan, Inc. as
a consulting fee for the services of Mr. Hardtke
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