9
Petitioner was aware that she could have been treated as an
independent contractor if she had incorporated and that the
practice of requiring independent contractors to be incorporated
was common in the industry. Of course, if petitioner had
incorporated and been treated as an independent contractor,
petitioner would then have been required to pay for her own
worker's compensation insurance. Petitioner's testimony,
combined with the above document, clearly outlines the nature of
the relationship petitioner and her principal thought they had
created, that of employer/employee.
Petitioner contends, in the alternative, that she was a
"statutory employee" pursuant to section 3121(d)(3), and, thus,
that she is still entitled to deduct her expenses on Schedule C.
We disagree. Petitioner clearly does not meet the requirements
of section 3121(d)(3) as she was not engaged in work as an agent
driver, commission driver, insurance salesman, home worker, or
traveling salesman. Furthermore, none of the Forms W-2 indicated
that petitioner was a "statutory employee".
On the basis of the record, we find that petitioner was
hired as an employee in her profession as a makeup artist during
the 1994 tax year.
2. Earned Income Credit
An eligible individual is allowed an earned income credit
for the taxable year in an amount equal to the credit percentage
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