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B. Petitioner’s Reliance on the Common Law
Petitioner further asserts that, notwithstanding section
3121(d)(1), a corporate officer is not an employee for employment
tax purposes unless he or she is an employee under the common
law. Petitioner bases that argument on the following language
from Tex. Carbonate Co. v. Phinney, 307 F.2d 289, 291-292 (5th
Cir. 1962):
The statutory definition of “employees” as
including officers of a corporation will not be so
construed as to mean that an officer is an employee per
se. * * * in determining whether an officer is an
employee within the meaning of the statutes the usual
employer-employee tests are to be applied. * * *
Petitioner then argues that Mr. Grey was not an employee at
common law because petitioner never exercised control over
Mr. Grey in the performance of his services.3
Even if the common law control factor were relevant to our
analysis,4 petitioner has failed to prove that it did not
3 We note that petitioner ignores the following additional
language from Tex. Carbonate Co. v. Phinney, 307 F.2d 289, 292
(5th Cir. 1962):
Even though an absence of control is shown, and this as
we have noted has not been done, the force of the
factor is diminished to near de minimis by the fact
that * * * [the service provider] himself was a member
of the Board of Directors, a Vice President, and the
executive of the Company in charge of its sales and the
development of its markets. * * *
4 Secs. 31.3121(d)-1(b) and 31.3306(i)-1(e), Employment Tax
Regs., discussed in part I.A., supra, were promulgated after the
years at issue in Tex. Carbonate Co. v. Phinney, supra.
(continued...)
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