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B. Employee or Independent Contractor
Petitioner’s entitlement to the deduction at issue hinges
upon the proper classification of her work relationship with the
State Department.
Petitioner asserts she performed services under the personal
service contracts as an independent contractor.2 Respondent
asserts that petitioner was a common law employee of the State
Department.
The term “employee” is not defined in the Internal Revenue
Code. Consequently, whether an individual is an employee for
purposes of section 401(c) is a factual question the answer to
which depends upon the application of common law concepts. See
Clackamas Gastroenterology Associates, P.C. v. Wells, 538 U.S.
440, 444-445 (2003); Nationwide Mut. Ins. Co. v. Darden, 503 U.S.
318, 322-323 (1992); Weber v. Commissioner, 60 F.3d 1104,
1110-1111 (4th Cir. 1995), affg. 103 T.C. 378 (1994); Air
Terminal Cab, Inc. v. United States, 478 F.2d 575, 578 (8th Cir.
1973); Profl. & Executive Leasing, Inc. v. Commissioner, 89 T.C.
225, 232 (1987), affd. 862 F.2d 751 (9th Cir. 1988); Burnetta v.
Commissioner, 68 T.C. 387, 397 (1977); Simpson v. Commissioner,
2Petitioner asserts that she cannot be an employee of the
State Department because the personal service contracts specified
that she was not an appointed Federal employee as defined in 5
U.S.C. sec. 2105. We need not address this argument, because we
find that petitioner was an independent contractor and not a
common law employee of the State Department.
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