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In United States v. W.M. Webb, Inc., 397 U.S. 179 (1970),
the Supreme Court finally held that the employment status of
fishing boat captains and crew members should be decided under
maritime law. This had the effect of increasing the likelihood
that many fishing boat workers would be classified as employees
for employment tax purposes. See Marmoll, “Employment Status--
Employee v. Independent Contractor”, 391-3rd Tax Management
Portfolio (BNA), A-79 (2001) (citing Anderson v. United States,
450 F.2d 567 (5th Cir. 1971); Rev. Rul. 72-385, 1972-2 C.B. 535).
c. 1976 Version of Section 3121(b)(20)
In 1976, Congress responded to the plight of the small
fishing boat owners by enacting the first version of section
3121(b)(20), with an effective date of December 31, 1971, under
the Tax Reform Act of 1976, Pub. L. 94-455, sec. 1207(e)(1)(A)
and (f)(4), 90 Stat. 1706, 1708. Under the Revenue Act of 1978,
Pub. L. 95-600, sec. 701(z)(1), 92 Stat. 2921, section
3121(b)(20) was made retroactive to December 31, 1954.
In explaining the genesis of section 3121(b)(20), the report
by the Senate Committee on Finance summarized the practical
problems that would be encountered by small fishing boat owners
if they were required to treat their workers as employees:
The crews that work on boats used in fishing
* * * are frequently “pickup” crews composed of
individuals who may work for only a few voyages, and
sometimes even for only one voyage. * * * Thus, the
voyage partakes more of the nature of a joint venture
than it does of an employment situation.
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