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the beauticians under his management as employees.
Second, petitioner failed to file the requisite Federal tax
returns, including information returns, as required under section
530(a)(1)(B). Petitioner conceded that Forms 1099 and Forms W-2
were not filed with the IRS. The record is also clear that
petitioner failed to file Forms 940 and 941. Although petitioner
relies on Mr. Brents’ testimony that the Forms 1099 and Forms W-2
were prepared and delivered to each beautician, we do not find
Mr. Brents’ self-serving testimony credible. It is well settled
that we are not required to accept the self-serving testimony of
petitioner or his accountant in the absence of corroborating
evidence. See Tokarski v. Commissioner, 87 T.C. 74, 77 (1986).
Finally, petitioner may be afforded relief under section 530
if he had a reasonable basis for not treating the beauticians as
employees. This requirement may be established if petitioner’s
treatment of the individual beautician was based on any of the
following: (1) Judicial precedent, published rulings, technical
advice to the employer, or a letter ruling to the employer; (2)
past examination of the employer by the IRS in which there was no
assessment attributable to the treatment for employment tax
purposes of individuals holding positions substantially similar
to the position held by this individual; or (3) longstanding
recognized practice of a significant segment of the industry in
which the individual was engaged. Sec. 530(a)(2).
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