Louis M. Pavich - Page 4

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               (1) appointed in the civil service by one of the                       
                    following acting in an official capacity--                        
                    (A)    the President;                                             
                    (B)    a Member or Members of Congress, or the                    
                           Congress;                                                  
                    (C)    a member of a uniformed service;                           
                    (D)    an individual who is an employee under                     
                           this section;                                              
                    (E)    the head of a Government controlled                        
                           corporation; or                                            
                    (F)    an adjutant general designated by the Secretary            
                           concerned under section 709(c) of title 32.                
               Pavich was certainly not “appointed in the civil service.”             
          The Commissioner’s argument--that Pavich is Raytheon’s, and only            
          Raytheon’s, “employee” at common law--is strong, but not without            
          doubt:  An individual may have more than one employer at the same           
          time.  “A person may be the servant of two masters * * * at one             
          time as to one act, if the service to one does not involve                  
          abandonment of the service to the other.”  2 Restatement, Agency            
          2d, sec. 226 (1958).  And previous cases decided under section              
          912(2) seem to have all involved taxpayers who had no connection            
          with the Federal Government, rather than the sort of dual control           
          Pavich credibly testified he was subject to.  See, e.g.,                    
          Grauvogel v. Commissioner, 768 F.2d 1087, 1089 (9th Cir. 1985)              
          (Alaska State Department of Fish and Game biologist), affg. T.C.            
          Memo. 1984-124.                                                             
               But we don’t need to dive into this murk.  As the                      
          Commissioner also argues, section 912(2) requires an exempt cost-           





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