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periods between September 3 and December 24, 1999 (referred to
herein as the “disputed pay period”).1 During the disputed pay
period, petitioner received weekly paychecks of approximately
$737.28 for most of the weeks in issue. However, these
paychecks were drawn from New Dimensions’ general corporate
account and were not processed through Digit. In contrast to
the paychecks issued by Digit, these paychecks were handwritten
and issued without pay stubs or any kind of receipt indicating
withholding for Federal or State income taxes or other required
purposes. Each paycheck on its face showed that the entire
amount of the check was payable to petitioner and also contained
a notation, such as “pay,” “salary,” or “dispatcher” indicating
that the check was issued as compensation for services
performed.
New Dimensions reported payment of $12,396 to petitioner
during the disputed pay period as nonemployee compensation on a
Form 1099 for 1999 and did not include this amount on
petitioner’s Form W-2 for 1999. According to New Dimensions,
petitioner and the company agreed to change petitioner’s status
from employee to independent contractor for the disputed pay
1The final weekly pay period of 1999 was the pay period
ending December 31. The corresponding pay date for this period
occurred in January 2000 and is not considered income earned in
1999.
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Last modified: May 25, 2011