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behalf of, and the transmission to, his principal * * *
of orders from wholesalers, retailers, contractors, or
operators of hotels, restaurants, or other similar
establishments for merchandise for resale or supplies
for use in their business operations * * *.
Sec. 3121(d)(3)(D). An individual can be a “statutory employee”
under section 3121(d)(3) only if that individual is not a common
law employee under section 3121(d)(2). Ewens & Miller, Inc. v.
Commissioner, supra. Generally, as statutory employees under
section 3121(d)(3)(D), “City or traveling salesmen who sell to
retailers or to the others specified, operate off the premises of
their principals, and are generally compensated on a commission
basis”. Sec. 31.3121(d)-1(d)(3)(iv)(a), Employment Tax Regs.
A common law employee generally reports business expenses on
Schedule A, subject to limitations under section 67, but a
statutory employee under section 3121(d)(3)(D) is not an employee
for purposes of section 62 and may deduct business expenses on
Schedule C. See sec. 3121(d); see also Prouty v. Commissioner,
T.C. Memo. 2002-175 (illustrating that a statutory employee may
reflect business income and expenses in full on Schedule C);
Lickiss v. Commissioner, T.C. Memo. 1994-103 (holding that the
taxpayer was a common law employee and that any related business
expenses were to be reported on Schedule A, subject to the
limitations under section 67); Rev. Rul. 90-93, 1990-2 C.B. 33
(holding that a statutory employee under section 3121(d)(3) for
employment tax purposes is not a common law employee for purposes
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