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financial hardship arising from proposed tax assessments for
prior years in cases where they had not treated their workers as
employees. See id.; Staff of Joint Comm. on Taxation, General
Explanation of the Tax Reform Act of 1976, at 380-381 (J. Comm.
Print 1976), 1976-3 C.B. (Vol. 2) 1, 392-393.11
d. Rev. Rul. 77-102
Following enactment of section 3121(b)(20) in 1976, the
Commissioner issued Rev. Rul. 77-102, 1977-1 C.B. 299, which
explains respondent’s position in this case that proceeds after
subtraction of operating expenses depend on the amount of the
boat’s catch of fish under section 3121(b)(20). In situation 1
of Rev. Rul. 77-102, supra, the boat owner employs a captain and
eight other crew members to perform services. Six of the nine
crew members receive remuneration by dividing equally 60 percent
of the net proceeds from the sale of the catch after subtracting
from the gross proceeds certain specified expenses such as ice
and fuel and a payment of $25 each to the mate, engineer, and
11As explained by the Joint Committee on Taxation, the
retroactive effective date barred retroactive deficiency
assessments against boat owners who treated fishing boat workers
as self-employed before enactment of sec. 3121(b)(20) for past
years still open under the statute of limitations. See Staff of
Joint Comm. on Taxation, General Explanation of the Tax Reform
Act of 1976, at 382 (J. Comm. Print 1976), 1976-3 C.B. (Vol. 2)
1, 394. However, crew members treated as employees before
enactment of sec. 3121(b)(20) were not required to pay the higher
rate of Social Security tax required of self-employed
individuals, nor were refunds of the employer’s share of social
security taxes to be made to boat owners who had paid them. See
id.
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