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Respondent determined deficiencies in petitioner’s Federal
income taxes and penalties as follows:
Penalty
Year Deficiency Sec. 6662(a)
1992 $2,242 $448
1993 3,110 622
1994 705 141
The issues are whether petitioner qualifies as a statutory
employee under section 3121(d)(3)(C) and whether petitioner is
liable for the negligence penalties under section 6662(a) for the
years in issue. At the time the petition was filed, petitioner
resided in Petersburg, New York.
Background
The applicable facts may be summarized as follows. During
the years at issue petitioner’s occupation consisted of repairing
and maintaining x-ray imaging equipment for medical
establishments. Petitioner’s income during these years was
received from two entities: Troy Management Associates, Inc.
(Troy), and Empire Imaging Technologies, Ltd. (Empire). At issue
is the work arrangement between petitioner and Empire.
Empire was formed in 1992 as a joint venture between a group
of radiologists and several individuals, including petitioner,
who serviced medical imaging equipment. Empire provided
maintenance and sales services to various medical establishments
and dealt with several types of medical imaging equipment,
including x-ray imaging equipment, magnetic resonance imaging
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