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To decide this case, we must answer a question of first
impression in this Court: whether the requirement of section
3121(b)(20) that the individual crew member receive a share of
the “proceeds” from the sale of the catch that “depends on the
amount” of the boat’s catch means that only gross proceeds can
depend on the amount of the boat’s catch, as petitioners contend,
or that proceeds after subtraction of operating expenses can also
depend on the amount of the catch, as respondent contends. The
statute, conference report and other legislative history,
regulation and its preamble, and caselaw do not specifically
address this question.
As explained below, we hold petitioner was self-employed
under section 3121(b)(20) on the ground that proceeds from the
sale of the catch after subtraction of operating expenses depend
on the amount of the boat’s catch.
Respondent explicitly acknowledges in his reply brief and
petitioners implicitly acknowledge (by recourse to and use of
legislative history) that section 3121(b)(20) is ambiguous and
requires interpretation. In arriving at our interpretation, we
examine the legislative history of section 3121(b)(20) and the
history of commercial practices of the fishing industry, which
were referred to in the legislative history, to understand the
commercial context of the employment tax issue that Congress
addressed.
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