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For 1992, petitioner reported no salaries and wages on its
Federal corporate income tax return. Petitioner reported
$115,287 of subcontractual labor, and it issued 36 Forms 1099-
MISC reporting total payments of $115,287.05.
Petitioner filed Forms 941, Employer’s Quarterly Federal Tax
Return, for the four quarters of 1992 and reported no wages
subject to withholding, no withheld income tax, no Social
Security tax, and no Medicare tax. Petitioner’s Form 941 for the
last quarter of 1992 reported that the date final wages were paid
was December 31, 1991, that it had no employees, and that it was
out of business. Petitioner’s Form 940, Employer’s Annual
Federal Unemployment (FUTA) Tax Return, for 1992 also reported no
wages, that petitioner had no employees, and that it was out of
business.
Respondent determined that the bakery workers, cash payroll
workers, route distributors, and outside sales workers were
employees for employment tax purposes for 1992. Respondent
further determined that petitioner was not entitled to section
530 relief for any of these workers. Respondent also determined
penalties pursuant to section 6656.
OPINION
I. Jurisdiction Over Amounts
In its petition, petitioner disputed the amounts of the
employment taxes and penalties that were set forth on the
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