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to the mate, cook, and engineer * * * in recognition of services
they perform at sea, in addition to their normal duties”,
according to a sliding scale or schedule that depended on a
percentage of the proceeds from the catch.
The Court of Claims held that crew members who receive pers
are employees because per payments are flat fees that do not
depend on the amount of a particular catch as required by section
3121(b)(20) as originally enacted. The Court of Claims upheld
Rev. Rul. 77-102, supra, regarding the interpretation of the
“pers” issue and section 31.3121(b)(20)-1(a), Employment Tax
Regs., as reasonable interpretations of section 3121(b)(20). The
Court of Claims did not discuss nor was it called upon to
consider the Commissioner’s interpretation in Rev. Rul. 77-102,
supra, of “proceeds” as including proceeds after subtraction of
operating expenses.
g. 1996 Amendment of Section 3121(b)(20)
In 1996, Congress overruled Flamingo Fish Corp. v. United
States, supra, by adding subparagraph (A) to section 3121(b)(20),
as part of the Small Business Job Protection Act of 1996 (SBJPA),
Pub. L. 104-188, sec. 1116, 110 Stat. 1762. Section 3121(b)(20)
(A) applies to remuneration paid after December 31, 1994; it also
applies to remuneration paid after December 31, 1984, and before
January 1, 1995, unless the payor treated the remuneration when
paid as subject to FICA taxes. Under section 3121(b)(20)(A),
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