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Furthermore, although section 3121(d)(1) may be inapplicable
to the extent that an officer performs services in some other
capacity, i.e., as an independent contractor, petitioner has
neither contended nor offered evidence that Murdock worked for or
was engaged by petitioner in a capacity other than president.
See Joseph M. Grey Pub. Accountant, P.C. v. Commissioner, 119
T.C. at 129-130; Rev. Rul. 82-83, 1982-1 C.B. 151, 152. Hence,
we conclude that Murdock was an employee of petitioner for
employment tax purposes, in accordance with section 3121(d)(1).
B. Availability of Section 530 Relief
Section 530 affords relief from employment tax liability,
notwithstanding an adverse classification, where the following
three requirements are satisfied: (1) The taxpayer has not
treated the individual, or any individual holding a substantially
similar position, as an employee for any period; (2) the taxpayer
has consistently treated the individual as not being an employee
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 and does not argue that
petitioner fails to meet the second. Rather, the parties dispute
whether petitioner had a reasonable basis for not treating
Murdock as an employee.
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