- 11 - (A) judicial precedent or published rulings, whether or not relating to the particular industry or business in which the taxpayer is engaged, or technical advice, a letter ruling, or a determination letter pertaining to the taxpayer; or (B) a past Internal Revenue Service audit (not necessarily for employment tax purposes) of the taxpayer, if the audit entailed no assessment attributable to the taxpayer’s employment tax treatment of individuals holding positions substantially similar to the position held by the individual whose status is at issue * * *; or (c) long-standing recognized practice of a significant segment of the industry in which the individual was engaged * * *. A taxpayer who fails to meet any of the safe havens is still entitled to relief if the taxpayer can demonstrate, in some other manner, a reasonable basis for not treating the individual as an employee. Id. Here, petitioner asserts that its position is supported by the following excerpt from Durando v. United States, 70 F.3d 548, 552 (9th Cir. 1995): [It is] improper to treat income earned by a corporation through its trade or business as though it were earned directly by its shareholders, even when, as here, the shareholders’ services help to produce that income. An S corporation’s income passes through to its shareholders not because they helped to create that income, but because they are shareholders. The excerpt relied upon by petitioner does not support petitioner’s position. Respondent is not attempting to treat petitioner’s income as though the income were earned directly byPage: 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