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the Court of Appeals for the Eighth Circuit has explained in a
scenario where medical residents sought refund of employment
taxes withheld from their stipends:
section 530 allows employers to avoid liability for
past-due employment taxes when the employer erroneously
but reasonably classified employees as independent
contractors rather than employees.
By its very terms, section 530 is a relief
provision available only to employers who erroneously
classify their employees. Section 530 applies if (1)
the taxpayer does not treat a worker as an employee for
employment tax purpose during a particular period; (2)
the taxpayer files all required federal employment tax
returns on a basis consistent with this treatment; and
(3) the taxpayer has a reasonable basis for not
treating the worker as an employee. If these
requirements are satisfied, tax liability is terminated
“for purposes of applying such taxes for such period
with respect to the taxpayer.” Notwithstanding the
clarity of the statute, the residents contend that a
broad interpretation of the term “taxpayer” is
appropriate because they are, at least in a general
sense, “taxpayers.” We do not agree, for the focus of
section 530 is on the taxpayer’s treatment of the
taxpayer’s employees. In this context, it is clear
that the term “taxpayer” refers only to employers and
not to employees. [Ahmed v. United States, 147 F.3d
791, 797 (8th Cir. 1998); citations omitted.]
Moreover, the view of this Court is in accord with that
recounted above, and we have expressly held that “‘Taxpayer’ as
used in the context of Section 530 refers to an employer”.
Pariani v. Commissioner, T.C. Memo. 1997-427. Accordingly,
petitioners’ contentions in this regard are not germane and
warrant no further discussion. We hold that petitioner was an
employee of DWP and not an independent contractor for Federal tax
purposes.
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