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(B) in the case of periods after December 31,
1978, all Federal tax returns (including information
returns) required to be filed by the taxpayer with
respect to such individual for such period are filed on
a basis consistent with the taxpayer’s treatment of
such individual as not being an employee,
then, for purposes of applying such taxes for such period
with respect to the taxpayer, the individual shall be deemed
not to be an employee unless the taxpayer had no reasonable
basis for not treating such individual as an employee.
Under section 530(a) there are two separate questions–-viz,
whether the corporation filed all the returns required to be
filed, and second whether the corporation had a reasonable basis
for not treating Dr. Katz as an employee.
With regard to the first question, section 6041(a) requires,
inter alia, that
All persons engaged in a trade or business and making
payment in the course of such trade or business to another
person, of * * * compensations * * * of $600 or more in any
taxable year * * * shall render a true and accurate return
to the Secretary, under such regulations * * * as may be
prescribed by the Secretary, setting forth the amount of
such * * * income, and the name and address of the recipient
of such payment.
The term “person” includes corporations. Sec. 7701(a)(1).
Furthermore, under the regulations, petitioner was required to
file a Form 1099 reflecting the compensation paid to Dr. Katz.
Sec. 1.6041-1(a)(2), Income Tax Regs. Petitioner does not seem
to dispute that, if its corporate entity is recognized, it was
required to file Forms 1099. In all events, if the corporate
entity is recognized, consistent with the Court of Federal
Claims, we hold that petitioner would have been required to file
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Last modified: May 25, 2011