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(D) as a traveling or city salesman,
other than as an agent-driver or commission-
driver, engaged upon a full-time basis in the
solicitation on the behalf of, and the
transmission to, his principal (except for
side-line sales activities on behalf of some
other person) of orders from wholesalers,
retailers, contractors, or operators of
hotels, restaurants, or other similar
establishments for merchandise for resale or
supplies for use in their business
operations;
if the contract of service contemplates that substantially
all of such services are to be performed personally by such
individual; except that an individual shall not be included
in the term "employee" under the provisions of this
paragraph if such individual has a substantial investment in
facilities used in connection with the performance of such
services (other than in facilities for transportation)
* * *.
An individual is a statutory employee under section
3121(d)(3) only if such individual is not a common law employee
under section 3121(d)(2).
Whether an individual is a common law employee under section
3121(d)(2) is a question of fact. Profl. & Executive Leasing,
Inc. v. Commissioner, 89 T.C. 225, 232 (1987), affd. 862 F.2d 751
(9th Cir. 1988); Simpson v. Commissioner, 64 T.C. 974, 984
(1975). Among the relevant factors in determining the substance
of an employment relationship are the following: (1) The degree
of control exercised by the principal over the details of the
work, (2) the taxpayer's investment in facilities, (3) the
taxpayer's opportunity for profit or loss, (4) permanency of the
relationship between the parties, (5) the principal's right of
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