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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. As regards the second,
respondent contends that petitioner did not meet this reporting
requirement for 1996 and 1997, but, because of the Form 1099-
MISC, respondent does not argue that a similar failure exists for
1998. The third requirement is in dispute for each 1996 through
1998, and, since lack of a reasonable basis for not treating
Ludlow as an employee will render Section 530 relief unavailable
for all years, without regard to the other criteria, we begin
with this element.
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 relies on judicial precedent as its
reasonable basis for not treating John F. Ludlow, its
sole shareholder and president, as an employee during
any part of 1996, 1997 and 1998; said judicial
precedent is Texas Carbonate Company v. R.L. Phinney,
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