Superior Proside, Inc. - Page 9




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                    (A) judicial precedent, published rulings,                        
               technical advice with respect to the taxpayer, or a                    
               letter ruling to the taxpayer;                                         
                    (B) a past Internal Revenue Service audit of the                  
               taxpayer in which there was no assessment attributable                 
               to the treatment (for employment tax purposes) of the                  
               individuals holding positions substantially similar to                 
               the position held by this individual; or                               
                    (C) long-standing recognized practice of a                        
               significant segment of the industry in which such                      
               individual was engaged.                                                
               In specified circumstances, Section 530(e)(4) places the               
          burden of proof on the Commissioner with respect to certain                 
          issues under Section 530, but this provision does not affect our            
          analysis here.  Section 530(e)(4) applies only to periods after             
          December 31, 1996, so has no bearing on petitioner’s liabilities            
          for 1995 and 1996.  Small Business Job Protection Act of 1996,              
          Pub. L. 104-188, sec. 1122(b)(3), 110 Stat. 1767.  For subsequent           
          periods, a taxpayer desiring to take advantage of Section                   
          530(e)(4) first must establish a prima facie case that it was               
          reasonable not to treat an individual as an employee and must               
          have fully cooperated with the Secretary.  Because, as explained            
          in detail below, petitioner did not establish a prima facie case            
          that its treatment of Murdock was reasonable, the burden of proof           
          remains on petitioner with respect to 1997 as well.                         











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