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To the extent that petitioner is entitled to any business
expense deductions, respondent argues that the deductions should
be treated as employee business expenses, deductible as
miscellaneous itemized deductions. See secs. 62(a)(1) and (2),
67. In support of this argument, respondent points out that
petitioner’s employment contracts with the DOI constitute
agreements entered into pursuant to section 218 of the Social
Security Act. That being so, respondent relies upon section
3121(d)(4), which defines “employee” for purposes of the Federal
Insurance Contributions Act (FICA) as “any individual who
performs services that are included under an agreement entered
into pursuant to section 218 of the Social Security Act.”
Respondent apparently takes the position that an individual who
fits within the definition of employee for FICA purposes should
be treated as an employee for purposes of section 62. We
disagree.
In Hathaway v. Commissioner, T.C. Memo. 1996-389, we held
that a taxpayer described as an employee in section 3121(d)(3) is
not necessarily an employee for purposes of the treatment of the
taxpayer’s business expense deductions. Instead, we concluded
that for such purposes, the distinction between an employee and
an independent contractor is made through the application of
common-law rules applicable in determining whether an employer-
employee relationship exists. See id.
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