Juan Ramirez - Page 12




                                       - 12 -                                         
          prima facie case that it was reasonable not to treat an                     
          individual as an employee for employment tax purposes.  Small               
          Business Job Protection Act of 1996, Pub. L. 104-188, sec.                  
          1122(a), 110 Stat. 1766 (adding subsection (e) to Revenue Act               
          section 530).  Because, as explained below, petitioner has failed           
          to establish a prima facie case that his treatment of his workers           
          for employment tax purposes was reasonable, respondent does not             
          bear the burden of proof in this case.                                      
               Revenue Act section 530(a)(2) sets forth three statutory               
          safe harbors for purposes of establishing reasonable basis.                 
          Reasonable reliance upon any of the circumstances enumerated in             
          subparagraph (A), (B), or (C) of Revenue Act section 530(a)(2) is           
          deemed sufficient to establish the requisite reasonable basis.              
          With regard to Revenue Act section 530(a)(2)(A), petitioner has             
          presented no judicial precedent, published ruling, technical                
          advice, or letter ruling on which he relied in treating his                 
          workers as independent contractors.  With regard to subparagraphs           
          (B) and (C), petitioner has not provided evidence that there was            
          a past employment tax audit in which his classification of the              
          workers was not challenged, nor has he provided evidence that               
          treating the workers as independent contractors was in accordance           
          with a long-standing practice within the waterproofing industry.            
          The safe havens of Revenue Act section 530(a)(2) are therefore              
          inapplicable on the record before us.  We conclude that                     







Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next 

Last modified: March 27, 2008