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OPINION
1. The Statutory Background
Sections 3111 and 3301 impose taxes upon employers under the
Federal Insurance Contributions Act (FICA) and the Federal
Unemployment Tax Act (FUTA), respectively, commonly referred to
as employment taxes, based on the wages paid to employees. In
this case it is stipulated that, if petitioner’s corporate entity
is not disregarded, Dr. Katz was an employee for employment tax
purposes. See sec. 3121(d) and the regulations thereunder.2
Petitioner, however, argues that under section 530 of the Revenue
Act of 1978, Pub. L. 95-600, 92 Stat. 2763, 2885 (hereinafter
section 530),3 Dr. Katz should not be deemed to be an employee.
Section 530(a)(1) provides:
SEC. 530. CONTROVERSIES INVOLVING WHETHER INDIVIDUALS
ARE EMPLOYEES FOR PURPOSES OF THE EMPLOYMENT
TAXES.
(a) Termination of Certain Employment Tax Liability for
Periods Before 1980.-–,
(1) In general.–-If-–
(A) for purposes of employment taxes, the taxpayer
did not treat an individual as an employee for any
period ending before January 1, 1980, and
2 Sec. 3121(d)(1) defines an employee, inter alia, as “any
officer of a corporation”. See also sec. 3306(i).
3 Sec. 530 was amended by adding subsection (e). See Small
Business Job Protection Act of 1996, Pub. L. 104-188, sec. 1122,
110 Stat. 1766. This amendment has no effect on the resolution
of this case.
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Last modified: May 25, 2011