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petitioner fails to meet the second. Rather, the parties dispute
whether petitioner had a reasonable basis for not treating Graham
as an employee.
Concerning the existence of a reasonable basis for purposes
of Section 530(a)(1), Section 530(a)(2) sets forth three
statutory safe havens. Reliance upon any of the circumstances
enumerated in subparagraph (A), (B), or (C) of Section 530(a)(2)
is deemed sufficient to establish the requisite reasonable basis.
Subparagraph (A) lists judicial precedent, published
rulings, technical advice with respect to the taxpayer, or a
letter ruling to the taxpayer. The second amended petition
alleges:
The Petitioner relies on judicial precedent in
satisfaction of the provisions of the said Section 530
which establishes reasonable basis for Petitioner’s
treatment of its majority shareholder and president,
Michael J. Graham, as a non-employee during all times
and all years * * *; the said judicial precedent relied
on by Petitioner is Texas Carbonate Company v. R.L.
Phinney, 307 F.2d 289 (5th Cir.), cert denied, 371 U.S.
(1962).
On brief, petitioner reiterates reliance on Tex. Carbonate Co. v.
Phinney, 307 F.2d 289 (5th Cir. 1962), and cites as well to
Automated Typesetting, Inc. v. United States, 527 F. Supp. 515
(E.D. Wis. 1981), in support of the premise that petitioner
reasonably looked to common law control concepts in classifying
Graham.
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