Joseph M. Grey Public Accountant, P.C. - Page 1

                                   119 T.C. No. 5                                     

                               UNITED STATES TAX COURT                                

                JOSEPH M. GREY PUBLIC ACCOUNTANT, P.C., Petitioner v.                 
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 4789-00.           Filed September 16, 2002.                

                    This is an action for redetermination of employment               
               status.  G is the president and sole shareholder of P, an              
               S corporation.  P failed to treat G as an employee.  R                 
               determined that G was an employee of P’s for purposes of               
               Federal employment taxes.                                              
                    1.  Held:  P is subject to Federal employment taxes               
               since G, an officer, is an employee within the meaning of              
               secs. 3121(d)(1) and 3306(i), I.R.C.                                   
                    2.  Held, further, P had no reasonable basis for not              
               treating G as an employee and therefore is not entitled to             
               relief pursuant to sec. 530 of the Revenue Act of 1978,                
               Pub. L. 95-600, 92 Stat. 2763, 2885, as amended.                       
                    3.  Held, further, alternatively, P is not entitled to            
               relief under sec. 530 of the Revenue Act of 1978,                      
               because such provision is limited to worker classification             
               issues arising under the common law.                                   

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