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company that is on the verge of bankruptcy. We believe it is
fair to characterize the parties’ agreement to change the
petitioner’s status from employee to independent contractor as a
temporary arrangement resulting from the company’s financial
condition. We conclude that this factor favors a finding that
petitioner was an independent contractor.
After a careful review of the record as a whole, we
conclude that, as petitioner and New Dimensions intended,
petitioner performed services as an independent contractor
during the disputed pay period. Accordingly, we hold that the
earnings in dispute are “net earnings from self-employment” for
purposes of section 1402(a), subject to the tax imposed on
“self-employment income” under section 1401(a).
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011