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petitioner, and that the payments to them from petitioner were
wages subject to Federal employment taxes, section 530 allows
petitioner relief from employment tax liability if two conditions
are satisfied. Section 530(a)(1) provides in relevant part:
(1) In general.--If
(A) for purposes of employment taxes,
the taxpayer did not treat an individual as
an employee for any period * * *, and
(B) in the case of periods after
December 31, 1978, all Federal tax returns
(including information returns) required to
be filed by the taxpayer with respect to such
individual for such period are filed on a
basis consistent with the taxpayer’s
treatment of such individual as not being an
employee,
then, for purposes of applying such taxes for such
period with respect to the taxpayer, the individual
shall be deemed not to be an employee unless the
taxpayer had no reasonable basis for not treating such
individual as an employee.
Section 530(a)(3) further clarifies section 530(a)(1) by
providing that if the “taxpayer (or a predecessor)” treated any
individual holding a “substantially similar position as an
employee”, then section 530 relief is not available to the
taxpayer. Sec. 530(a)(1), (3). We note that the statute does
not require the individuals to be identical; rather, the analysis
focuses on whether individuals were in substantially similar
positions.
For purposes of section 530(a)(1), a taxpayer is treated as
having a reasonable basis for not treating an individual as an
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