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conduct his business. Caselaw does not permit a taxpayer to use
his or her dual role as a shareholder of and service provider to
a corporation as grounds for ignoring the legal ramifications of
the business construct so selected. Moline Props., Inc. v.
Commissioner, 319 U.S. 436, 438-439 (1943); Joseph M. Grey Pub.
Accountant, P.C. v. Commissioner, supra at 129.
3. Application of Section 3121(d)(1)
On the basis of the foregoing analysis, the application of
section 3121(d)(1) is not precluded or limited here by
considerations pertaining to Sadanaga’s status as an
S corporation shareholder or under the common law. Section
3121(d)(1) and sections 31.3121(d)-1(b) and 31.3306(i)-1(e),
Employment Tax Regs., specify that corporate officers are to be
classified as employees if they perform more than minor services
and receive or are entitled to receive remuneration. The
overwhelming weight of the evidence here shows that Sadanaga’s
activities vis-a-vis petitioner met these criteria.
(Accordingly, considerations with respect to burden of proof do
not affect our analysis on this point.) Sadanaga at all relevant
times served as petitioner’s president and worked in all aspects
of petitioner’s consulting, surgical, and day-to-day business
operations. Sadanaga also obtained remuneration from petitioner
as his needs arose.
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