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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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Last modified: May 25, 2011