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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 Mr. Yeagle was not its employee and
that it properly distributed its net income to the Yeagles, as its
only shareholders, pursuant to section 1366. On the other hand,
respondent contends that Mr. Yeagle was an employee of petitioner
because he was an officer of petitioner and performed substantial
services on petitioner’s behalf.
Sections 3111 and 3301 impose FICA (social security) and FUTA
(unemployment) taxes on employers for wages paid to their
employees. An officer of a corporation, "who performs substantial
services for a corporation and who receives remuneration in any
form for those services is considered an employee, whose wages are
subject to Federal employment taxes." Veterinary Surgical
Consultants, P.C. v. Commissioner, 117 T.C. ___, ___ (2001) (slip
op. at 7); see also sec. 3121(d); sec. 31.3121(d)-(1)(b),
Employment Tax Regs.
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