Nu-look Design, Inc. - Page 11




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          shareholders in a manner consistent with treatment on the                   
          corporate return.  These rules, however, pertain to calculation             
          of income tax liability under subtitle A and have no bearing on             
          computation of Federal employment taxes.  Veterinary Surgical               
          Consultants, P.C. v. Commissioner, 117 T.C. 141, 145 (2001),                
          affd. sub nom. Yeagle Drywall Co. v. Commissioner, 54 Fed. Appx.            
          100 (3d Cir. 2002).  Furthermore, an employer cannot by the                 
          expedient of characterizing moneys paid in remuneration for                 
          services as distributions of net income, rather than as wages,              
          avoid FICA and FUTA liabilities.  Id. at 145-146.  Thus, as in              
          Veterinary Surgical Consultants, P.C. v. Commissioner, supra at             
          145-146, and Joseph M. Grey Pub. Accountant, P.C. v.                        
          Commissioner, 119 T.C. 121, 128 (2002), we reject any suggestion            
          that petitioner’s passing through of its net income to Stark                
          precludes the finding of an employer-employee relationship                  
          between petitioner and Stark.  We likewise reject as not germane            
          to the question before us petitioner’s reliance on section 1372,            
          addressing fringe benefits under subtitle A, and the reference to           
          that statute in Durando v. United States, supra at 551.  See                
          Veterinary Surgical Consultants, P.C. v. Commissioner, supra at             
          147-148, 150.                                                               
                    2.  Contentions Regarding Common Law Employment                   
               Petitioner contends that “employee” as used throughout                 
          section 3121(d) must be construed in a manner consistent with its           






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