James E. Anderson and Cheryl J. Latos - Page 13

                                       - 13 -                                         
               We address the issue under four headings.  First, we examine           
          the history of the commercial practices and employment tax                  
          treatment of fishing boat workers and fishing boat owners.                  
          Second, we interpret the requirement that an individual receive a           
          share of the “proceeds” from the sale of the catch that “depends            
          on the amount” of the boat’s catch.  In arriving at our                     
          interpretation, we examine:  (a) The general meaning of the terms           
          in section 3121(b)(20) and section 31.3121(b)(20)-1(a),                     
          Employment Tax Regs.; (b) the legislative history and                       
          congressional intent underlying section 3121(b)(20) and the                 
          issuance of section 31.3121(b)(20)-1(a), Employment Tax Regs.;              
          (c) Rev. Rul. 77-102, supra, and (d) the $100 exception in                  
          section 3121(b)(20)(A) and whether and how the canon of statutory           
          construction “expressio unius est exclusio alterius” bears on the           
          question.  Third, we apply section 3121(b)(20) to petitioner’s              
          fishing activities in light of our interpretation of the statute            
          and the regulation that his share of the proceeds after                     
          subtraction of operating expenses depended on the amount of the             
          catch.  Fourth, we consider petitioners’ other arguments.                   
          1.  History of Compensation Arrangements for Fishing Boat Workers           
               a.  The Lay System                                                     
               It has been customary in the fishing industry for fishing              
          boat owners to compensate their workers under the “lay” or                  
          “share” system; under this system, workers on fishing boats                 

Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011