Orneal and Martha Kooyers, et al. - Page 38

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               Our decision is supported by the agreements entered into               
          between P.I. Ministries and the OMK Company Trust.  Those                   
          agreements stated that the OMK Company Trust contracted                     
          petitioners’ services to P.I. Ministries on an independent                  
          contractor basis.  Consequently, because no employment                      
          relationship was created, P.I. Ministries did not withhold or pay           
          any employment taxes on the compensation paid for petitioners’              
          services.  Having been given the opportunity to choose the form             
          of the contract, petitioners have less freedom than respondent to           
          ignore the transactional form that they have adopted.  See                  
          Coleman v. Commissioner, 87 T.C. 178, 202 (1986), affd. without             
          published opinion 833 F.2d 303 (3d Cir. 1987); Bolger v.                    
          Commissioner, 59 T.C. 760, 767 n.4 (1973).  Petitioners were                
          independent contractors, and as such they are subject to                    
          self-employment tax.  See Simpson v. Commissioner, 64 T.C. 974,             
          983 (1975).  We sustain respondent’s determination on this issue.           
          VI. Petitioners Are Liable for the Accuracy-Related Penalty                 
               Under Section 6662(a)                                                  
               Section 6662(a) and (b)(1) imposes a penalty equal to 20               
          percent of the portion of an underpayment of income tax                     
          attributable to negligence or disregard of rules or regulations.            
          Negligence is defined as “any failure to make a reasonable                  
          attempt to comply with the provisions of * * * [the Code]”.  Sec.           
          6662(c).  Negligence is the lack of due care or the failure to do           
          what a reasonable and prudent person would do under the                     





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