James E. Anderson and Cheryl J. Latos - Page 16

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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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