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Petitioner did not file any employment tax returns for 1996,
1997, or 1998. Thus, the period of limitations on assessment of
employment taxes remains open indefinitely, and the notice of
determination sent by respondent was within the statutory limit.
III. Classification of Petitioner’s Workers
The employment tax sections of the Internal Revenue Code are
contained in subtitle C. Sections 3111 and 3301 impose taxes on
employers under the Federal Insurance Contributions Act (FICA)
and the Federal Unemployment Tax Act (FUTA). Section 3101
imposes a tax on employees under FICA based on their wages paid,
which the employer is required to collect under section 3102.
Under sections 3402 and 3403, employers are liable for
withholding from their employees’ wages the employees’ shares of
Federal income tax.
Respondent determined that petitioner’s workers were
employees for purposes of employment taxes and thus that
petitioner is liable for withholding the proper amounts of tax
under sections 3101, 3111, 3301, and 3402. Petitioner challenges
respondent’s classification of the individuals listed in the
notice of determination as employees of petitioner. Petitioner
maintains that these individuals were independent contractors,
and thus it was not responsible for withholding employment taxes.
Respondent’s determinations of fact are presumptively
correct, and petitioner bears the burden of proving, by a
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