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are: (1) Whether Ronald A. Stark (Stark) was an employee of
petitioner for Federal employment tax purposes during 1996
through 1998 and, if so, (2) whether petitioner is entitled to
relief under section 530 of the Revenue Act of 1978, Pub. L. 95-
600, 92 Stat. 2885, as amended (Section 530).
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. For convenience, FICA and FUTA taxes are collectively
referred to as employment taxes.
FINDINGS OF FACT
Some of the facts were deemed stipulated pursuant to Rule
91(f); certain additional facts have been stipulated by the
parties. The stipulated facts are incorporated in our findings
by this reference.
Petitioner’s Organization and Operations
Stark has been in the home improvement business since 1963.
After operating his business as a sole proprietorship from 1963
through 1986, Stark decided to incorporate for the purpose of
obtaining the benefits of limited shareholder liability for debts
of the corporation. Petitioner was incorporated in Pennsylvania
on January 20, 1987, and has at all relevant times operated as an
S corporation. Petitioner’s principal place of business was
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