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Therefore, we must decide whether the route distributors were
statutory employees. See sec. 3121(d)(3); Lickliss v.
Commissioner, T.C. Memo. 1994-103.
B. Whether the Route Distributors Were Statutory Employees
For the purposes of employment taxes, the term “employee”
also includes individuals who perform services for remuneration
as an agent-driver or commission-driver engaged in distributing
bakery products. Sec. 3121(d)(3)(A). Substantially all of these
services must be performed personally by such individual. Sec.
3121(d)(3) (flush language). Individuals are not included in the
term “employee” under section 3121(d)(3) if the individual has a
substantial investment in the facilities used in connection with
the performance of such services (other than facilities for
transportation), or if the services are in the nature of a single
transaction. Id.
The regulations provide that agent-drivers and commission-
drivers include individuals who operate their own truck, serve
customers designated by the person for whom they perform services
and customers solicited on their own, and whose compensation is a
8(...continued)
workers. Unlike the bakery workers and cash payroll workers, the
route distributors had an investment in facilities. Unlike the
outside sales workers, the record did not establish that
petitioner had the right to hire and fire the route distributors.
Unlike the bakery workers, cash payroll workers, and outside
sales workers, the record did not establish that petitioner had a
permanent relationship with the route distributors.
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