Dennis J. and Carol R. Kraus - Page 8

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          does not generally depend on the common law principles.  One such           
          category of statutory employee, which is relied on by petitioner,           
          is described in section 3121(d)(3)(A) as follows:  “an agent-               
          driver or commission-driver engaged in distributing meat                    
          products, vegetable products, fruit products, bakery products,              
          beverages (other than milk), or laundry or dry-cleaning services,           
          for his principal.”  If petitioner can show that he comes within            
          that definition and that he is not a “common law employee” as set           
          forth in section 3121(d)(2), he will be entitled to use Schedule            
          C to report his income and deductions.                                      
               Petitioner also relies on section 3508, which affords                  
          nonemployee status to certain statutorily defined classes of                
          activities.  In particular, that section applies to real estate             
          agents and direct sellers.  Petitioner contends that he is a                
          direct seller.                                                              
               Generally, a “direct seller” is defined in section                     
          3508(b)(2)(A) as a person engaged in the trade or business of               
          either selling consumer products in the home as opposed to a                
          permanent retail establishment or delivering or distributing                
          newspapers or shopping news.  Section 3508(b)(2)(B) also requires           
          that to qualify for direct seller status, petitioner must receive           
          renumeration related to sales, rather than to the number of hours           
          worked.  Finally, section 3508(b)(2)(C) requires that petitioner            
          perform services pursuant to a written contract that provides               

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