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running errands, filing, photocopying, preparing outgoing mail,
and tracking and paying bills.
Petitioner did not file Forms 941 for any of the years in
issue for either Smith or Mawson. Petitioner did not file any
Forms 1099-MISC, Miscellaneous Income, for the work that Smith
and Mawson performed. During the years in issue, petitioner
reported income from his law firm on a Schedule C, Profit or Loss
From Business. Petitioner reported payments to Smith and Mawson
as “negative receipts” on the Schedule C and failed to indicate
that deductions were being taken for payments made for
secretarial services.
OPINION
Employment Status
Whether an employer-employee relationship exists in a
particular situation is a factual question. Weber v.
Commissioner, 103 T.C. 378, 386 (1994), affd. per curiam 60 F.3d
1104 (4th Cir. 1995). For the purposes of employment taxes, the
term “employee” includes “any individual who, under the usual
common law rules applicable in determining the employer-employee
relationship has the status of an employee”. Sec. 3121(d)(2);
sec. 3306(i). Section 31.3121(d)-1(c)(2), Employment Tax Regs.,
defines the common law employer-employee relationship as follows:
(2) Generally such relationship exists when the
person for whom services are performed has the right to
control and direct the individual who performs the
services, not only as to the result to be accomplished
by the work but also as to the details and means by
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