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sole issue to be decided is whether John G. Yeagle (Mr. Yeagle) is
an employee of petitioner for the period at issue (each of the four
quarters of 1995, 1996, and 1997) for purposes of Federal
employment taxes.1
Rule references are to the Tax Court Rules of Practice and
Procedure, and except as otherwise noted, section references are to
the Internal Revenue Code in effect for the years at issue.
Background
The stipulation of facts and the attached exhibits are
incorporated herein. The stipulated facts are hereby found.
Petitioner is an S corporation that was incorporated in
Pennsylvania on October 2, 1989. At the time the petition was
filed, petitioner’s principal place of business was in Quakertown,
Pennsylvania. Petitioner operates a drywall construction business
that is the sole source of petitioner’s income. Mr. Yeagle owns 99
percent of petitioner’s stock. Mr. Yeagle’s wife, Terree Yeagle
(Mrs. Yeagle), owns the remaining 1 percent. Since petitioner’s
incorporation, Mr. Yeagle has been its president, and Mrs. Yeagle
has been its vice president and secretary.
Mr. Yeagle performs many services for petitioner, including
soliciting business, ordering supplies, entering into oral and
1 For convenience, we use the term "Federal employment
tax" to refer to taxes under secs. 3101-3125 (enacted as Federal
Insurance Contributions Act (FICA), ch. 9, 53 Stat. 175 (1939))
and secs. 3301-3311 (enacted as Federal Unemployment Tax Act
(FUTA), ch. 9, 53 Stat. 183 (1939)).
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