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characteristic of a principal and an independent contractor.
After weighing the above factors, giving particular weight to (1)
the lack of control, and lack of right to control, that TAG had
over its sales representatives, and (2) Hathaway’s substantial
investments and unreimbursed expenses, we conclude that Hathaway
was an independent contractor, and not a common law employee in
1989 and 1990.
We hold for petitioners on this issue.
In Rev. Rul. 90-93, 1990-2 C.B. 34, respondent announced the
position that a person described in section 3121(d)(3), commonly
referred to as a “statutory employee”, is “not an employee for
purposes of sections 62 and 67.” The parties cast much of their
presentation in terms of section 3121(d)(3). Because of our
determination that in 1989 and 1990 Hathaway was an independent
contractor for purposes of section 62(a), Hathaway’s trade or
business expenses are deductible “above the line” on Schedule C,
and need not be relegated to Schedule A. This result would not
be changed no matter how we were to rule on the section
3121(d)(3) issue, and so we decline to rule on that issue in the
instant case.
To take account of the parties’ agreements,
Decision will be entered
under Rule 155.
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