Veterinary Surgical Consultants, P.C. - Page 6




                                        - 6 -                                         
          each of the four quarters of 1994, 1995, and 1996.  On April 3,             
          1998, petitioner submitted to respondent a letter protesting the            
          proposed adjustments.                                                       
               On October 5, 1998, respondent sent petitioner a letter                
          advising that there would be no change resulting from the audit of          
          petitioner’s Form 1120S for 1995.  On November 17, 1998, respondent         
          issued to petitioner a Notice of Determination, in which respondent         
          determined that (1) Dr. Sadanaga was an employee of petitioner for          
          purposes of Federal employment taxes, and (2) petitioner was not            
          entitled to “safe harbor” relief from these taxes as provided by            
          section 530 of the Revenue Act of 1978, Pub. L. 95-600, 92 Stat.            
          2885 (Section 530).  Attached to the Notice of Determination was a          
          schedule detailing the amount of the proposed Federal employment            
          taxes.  Thereafter, petitioner filed with the Court a timely                
          petition seeking our review of respondent’s Notice of                       
          Determination.                                                              
                                     Discussion                                       
               Petitioner contends that Dr. Sadanaga was not its employee             
          and that it properly distributed its net income to Dr. Sadanaga, as         
          its sole shareholder, pursuant to section 1366.  On the other hand,         
          respondent contends that Dr. Sadanaga was an employee of petitioner         
          because he was an officer of petitioner and performed substantial           
          services on petitioner’s behalf.                                            








Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  Next

Last modified: May 25, 2011