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determined that Mr. Kovacevich, in 1994 and 1995, received from
petitioner $132,000 and $33,250, respectively, in wages that were
subject to taxes pursuant to the Federal Insurance Contributions
Act (FICA) and the Federal Unemployment Tax Act (FUTA) and
petitioner failed to pay the FICA and FUTA taxes relating to
those wages. Respondent also determined that petitioner was
liable for section 6656 and 6662(a) penalties relating to 1994
and 1995.
On June 3, 2003, the Court issued its Memorandum Opinion.
The Court held that Mr. Kovacevich was a statutory employee of
petitioner, and, in 1994 and 1995, Mr. Kovacevich received from
petitioner $132,000 and $33,250, respectively, in wages that were
subject to FICA and FUTA taxes. Petitioner contended that it was
entitled, pursuant to section 530, to relief from the FICA and
FUTA tax liabilities. The Court held, however, that petitioner
did not satisfy the requirements of section 530 and thus, was
liable for FICA and FUTA taxes relating to the wages paid to Mr.
Kovacevich. The Court also sustained respondent’s determinations
relating to the penalties.
Petitioner appealed the Tax Court’s decision to the Court of
Appeals for the Ninth Circuit. The Ninth Circuit “[affirmed] the
decision of the Tax Court in all respects except with regard to
its calculations of the amount of income tax withholding owed
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