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respondent reminded petitioners to file a petition in the Tax
Court within 90 days of the May 6, 1997, notice of deficiency if
they wished to contest the self-employment determination for
1995. Petitioners did not petition this Court, and on September
29, 1997, respondent assessed petitioners’ self-employment tax
deficiency.
During the period beginning May 1998 through January 1999,
petitioners sought the assistance of the problem resolution
office (later renamed taxpayer advocate office). In
correspondence with that office, petitioners contended that Mr.
Anderson was an employee of various boat owners and that each of
the boat owners failed to withhold employment tax. In that
context, petitioners argued that the boat owners were liable for
the Federal Insurance Contributions Act (FICA) tax. On July 23,
1998, Ms. Latos met with a representative of the taxpayer
advocate office and respondent’s counsel and generally raised
questions as to whether Mr. Anderson should be liable for FICA.
The representative and respondent’s counsel advised her that the
employers’ failure to withhold did not relieve Mr. Anderson from
his liability for the employee’s portion (one-half) of the FICA
tax. A short time later petitioners were provided a summary of
caselaw supporting the advice received at the July 23, 1998,
meeting.
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