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on all tax returns for periods after December 31, 1978; and
(3) the taxpayer has a reasonable basis for not treating the
individual as an employee. Sec. 530(a)(1), (3). With respect to
the case at bar, respondent has conceded that petitioner meets
the first of the above requirements and does not argue that
petitioner fails to meet the second. Rather, the parties dispute
whether petitioner had a reasonable basis for not treating Stark
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 amended petition alleges:
The Petitioner did not treat its Sole Shareholder,
Ronald A. Stark, as an employee during any part of
1996, 1997 and 1998, and the reasonable basis for not
treating Ronald A. Stark as an employee for the said
periods is based on judicial precedent contained in the
opinion of the 5th Circuit Court of Appeals in Texas
Carbonate Company v. R.L. Phinney, 307 F.2d 289 (5th
Cir.), cert denied, 371 U.S. 940 (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
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