- 32 -
years in cases where boat owners treated as self-employed their
workers who received a share of proceeds after subtraction of
operating expenses as determined under the lay system. See S.
Rept. 94-938, (Pt. I), supra at 385-386, 1976-3 C.B. (Vol. 3) at
423-424; Staff of Joint Comm. on Taxation, General Explanation of
the Tax Reform Act of 1976, supra at 380-381, 1976-3 C.B. (Vol.
2) at 392-393.15 Any retroactive assessments would rewrite the
compensation bargains entered into by fishing boat owners and
operators with the workers in reliance on the applicability of
section 3121(b)(20). Such assessments would create substantial
financial hardship to the small fishing boat owners and a
windfall to the workers, thereby frustrating the intent of
Congress in enacting section 3121(b)(20). Even if respondent
would appeal an adverse decision of this Court and suspend
efforts to collect employment taxes from the small fishing boat
owners, they would have contingent liabilities on their balance
sheets that could interfere with their ability to obtain loans or
sell their businesses.
15Under sec. 530 of the Revenue Act of 1978, Pub. L. 95-600,
92 Stat. 2885, fishing boat owners who erroneously classified
employees as self-employed might be relieved of employment tax
liability, and fishing boat workers, including petitioner, would
be deemed not to be employees of the owners for employment tax
purposes, if certain conditions were satisfied. See Joseph M.
Grey Pub. Accountant, P.C. v. Commissioner, 119 T.C. 121, 130
(2002), affd. 93 Fed. Appx. 473 (3d Cir. 2004). There is no
record evidence whether the requirements of sec. 530 of the
Revenue Act of 1978 would be applicable in the case at hand to
relieve the boat owners of employment tax liabilities.
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