James E. Anderson and Cheryl J. Latos - Page 21

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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          3121(b)(20) as originally enacted.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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