South Community Association - Page 17

                                       - 17 -                                         
          petitioner’s legal counsel for purposes of respondent’s audit               
          (and presumably for purposes of any litigation that resulted                
          thereafter); in some cases, the affidavits were incomplete as to            
          the dates of the affiant’s service in the gaming operation.  The            
          affidavits for the most part were presented to the affiants for             
          their signature at a monthly board meeting of petitioner in the             
          presence of petitioner’s current trial counsel, who signed as               
          notary of many of the affidavits.                                           
               Petitioner also challenges a characterization of the                   
          security guards as workers in petitioner’s gaming operation for             
          purposes of the “substantially all” test of section 513(a)(1).              
          We conclude that the characterization is appropriate.  Petitioner           
          argues that the security guards did not work in the gaming                  
          operation because they were independent contractors rather than             
          employees.  We disagree.  The fact that the security guards were            
          directly compensated by another entity through a contract with              
          petitioner is of no consequence to our determination under                  
          section 513(a)(1).  A plain reading of that section requires that           
          we focus on the “work” performed in “carrying on such trade or              
          business”.  We read nothing in the statute that limits this work            
          to that performed by employees as opposed to independent                    
          contractors.  See also Executive Network Club, Inc. v.                      
          Commissioner, T.C. Memo. 1995-21 (finding that casino workers               
          paid in tips by players worked for compensation even though the             

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011