Charles R. Clarke, D.B.A. Maxi's Today's Hair - Page 12




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          unsatisfactory services because the beautician “made the entire             
          place look bad”.  Furthermore, despite the fact that beauticians            
          could set their own work schedule, petitioner required                      
          beauticians to adjust their schedules to ensure walk-in customers           
          could be served.                                                            
               Petitioner argues that the beauticians’ ability to work for            
          other salons demonstrates a lack of continuity in the employer-             
          employee relationship.  We find this argument without merit.  In            
          Kelly v. Commissioner, T.C. Memo. 1999-140, this Court found that           
          working for a number of employers during a tax year does not                
          necessitate treatment as an independent contractor.                         
               After review of the entire record, we find that petitioner             
          failed to establish that the beauticians in question were                   
          independent contractors.  The weight of the evidence leads us to            
          conclude that the beauticians were petitioner’s employees during            
          the years at issue.                                                         
          Section 530 of the Revenue Act of 1978                                      
               Section 530 of the Revenue Act of 1978 provides relief for             
          employers who mistakenly claim their employees as independent               
          contractors.  In other words, even under our finding that the               
          beauticians were petitioner’s employees during the years at                 
          issue, petitioner may not be liable for the employment taxes if             
          he falls under the safe harbor of section 530.                              
               In order for petitioner to prevail, he must show the                   






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Last modified: May 25, 2011