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contained in the answer to the second amended petition that
additional individuals are employees of the taxpayer and that the
taxpayer is liable for additional employment taxes, additions to
tax, and penalties for the taxable periods in the notice of
determination.
B. Moneys Disguised as Loans
Although petitioner and respondent agree with our conclusion
that the Court has jurisdiction over the additional individuals
and the additional amounts of employment taxes,5 petitioner
argues that we do not have jurisdiction to rule on respondent’s
affirmative allegations that petitioner compensated its
shareholders through the payment of moneys disguised as loans.6
Congress has specifically given the Court jurisdiction to
determine the proper amount of employment tax under the
Commissioner’s determination of whether an individual is an
employee. Sec. 7436(a). Employment taxes are calculated by
5 The fact that the parties agree that the Court has
jurisdiction over these issues is not sufficient to provide us
with such jurisdiction; the Court still must determine that
Congress has granted us jurisdiction. See Ewing v. Commissioner,
118 T.C. 494, 498-507 (2002).
6 With respect to respondent’s affirmative allegations that
“petitioner compensated its shareholders through the payment of
monies disguised as loans and that such loans should be
recharacterized as wages,” petitioner argues that “Such
affirmative allegations are not allegations of worker
classification, are not allegations regarding treatment under
section 530(a) of the Revenue Act of 1978, and are not
allegations regarding the proper amount of employment tax owed”.
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Last modified: May 25, 2011