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determination that Ludlow was to be legally classified as an
employee for purposes of Federal employment taxes and that
petitioner was not entitled to relief from such classification
pursuant to Section 530. Enclosed with the notice was a schedule
setting forth petitioner’s liabilities for FICA and FUTA taxes.
It is stipulated that, if the Court decides that Ludlow is
to be classified as an employee for Federal employment tax
purposes for all periods in 1996, 1997, and 1998, the amounts of
taxes due and owing are as set forth in the notice of
determination. Conversely, if the Court decides that Ludlow
should not be classified as an employee for any of the periods in
issue, the parties agree that petitioner owes no employment
taxes.
ULTIMATE FINDINGS OF FACT
Ludlow, as president of petitioner, performed more than
minor services and received remuneration therefor.
Petitioner did not have a reasonable basis for failing to
treat Ludlow as an employee during the years in issue.
OPINION
I. Statutory and Regulatory Provisions
A. Subtitle C of the Internal Revenue Code
Subtitle C of the Internal Revenue Code governs payment of
employment taxes. In particular, sections 3111 and 3301 impose
taxes on employers under FICA (pertaining to Social Security) and
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