§31 — Tax withheld on wages

1286, 1288, was superseded by Rev.

1286, 1288, was superseded by Rev.

Petitioner further argues that section 31.3102-1(d), Employment Tax Regs., makes the employee liable for the employer's obligations, which conflicts with and is therefore superseded by section 3403.

Those regulations were superseded by regulations finalized on July 2, 2008, T.D.

The regulations are superseded by regulations finalized on July 1, 2008, T.D.

1996 Amendment of Section 3121(b)(20) In 1996, Congress overruled Flamingo Fish Corp.

The 1984 temporary regulation was in force until superseded by the final regulation, section 1.267(f)-1, Income Tax Regs., July 18, 1995.

§ 31A-21-102(3). We acknowledge that this law does not govern microcaptive-insurance companies; however, if a binder expires 150 days after the effective date absent a policy, it seems that at least for some types of insurance in Utah, presumably, a policy to be timely must be issued within 150 days of the effective date.

Therefore, petitioner was an American employer under section 3121(h) for the period at issue and as such, it is subject to section 3121(b) and the section 3121(b)(4) crewmen's exemption does not apply." Petitioner contends that section 3121(h) does not depend directly on an entity's classification under the check-the-box regulations but instead first imposes its own test based on the residence(s) ofthe entity's owner(s).

He claims that he passes the multifactor test built up by cases to distinguish common-law employees from independent contractors. And he claims that he was a statutory employee--a person who may be a common-law independent contractor but whom the Code treats as ifhe were an employee for some purposes while still allowing him to deduct business expenses on Schedule C. See sec. 3121(d)(3)(D); Rosato v.

Therefore, Forrest, which involved a section 31 credit, is inapposite and not controlling.

Therefore, Forrest, which involved a section 31 credit, is inapposite and not controlling.

Therefore, Forrest, which involved a section 31 credit, is inapposite and not controlling.

31.3121(d)-1(a)(3), EmploymentTax Regs. Section 7491, which shifts the burden ofproofto the Secretary in certain other circumstances, does not apply to employmenttax disputes.

31.3121(d)-1(a)(3), Employment Tax Regs. Section 7491(a)(1), which shifts the burden ofproofto the Secretary in certain other circumstances, does not apply to employment tax disputes.

Petitioners believe these differences are enough to distinguish a director from a trustee for purposes ofsection 31.3121(d)-1(b), Employment Tax Regs.

Respondent argues that section 31 .3121(b)(20)-l(a)(2), Employment Tax Regs ., does not apply to Mr .

We do not sustain respondent's deficiency determinations and therefore need not decide whether accuracy-relatedpenalties under section 6662(a) would be appropriate.

Respondent has not raised the issue of whether the litigation costs at issue here were capital expenses, and we express no opinion in this regard.

Excess Tax Withholding Pursuant to Section 31 On the 2018 Form 1040 petitioners reported income tax withheld on Forms W–2 and 1099–R of $19,960.

Statutory employees are those individuals who are considered employees regardless of common law rules pursuant to section 3121(d)(1), (3), or (4).

An individual qualifies as a statutory employee under section 3121(d)(3) only ifthe individual is not a common law employee pursuant to section 3121(d)(2).

Fiedziuszko was a statutory employee pursuant to section 3121(d)(3) for the 2012 tax year.4 Thus, petitioners were entitled to report business income and expenses on Schedule C oftheir Form 1040.

Although section 31 provides that the amount withheld by an employer as tax from an employee's wages "shall be allowed to the recipient ofthe income as a credit" against his income tax liability for that year, this credit is available only "[i]fthe tax has actually been withheld at the source." Sec.

Accordingly, we hold that Mr.

An individual qualifies as a statutory employee under section 3121(d)(3) only ifthe individual is not a common law employee pursuant to section 3121(d)(2).

Hom & Associates (JCHA); (4) whether petitioner was an employee ofJCHA pursuant to section 3121(d)(1) or (2); (5) whether petitioner is entitled to deduct additional gambling losses for 2006, 2007, and 2008, and ifso, in what amounts; (6) whether petitioner is entitled to deduct additional gambling expenses under section 162(a) for 2005, 2006, 2007, and 2008; (7) whether petitioner is entit

An individual qualifies as a statutory;employeeunder section 3121(d)(3) only ifthe individual is not a common law employee pursuant to section 3121(d)(2).

An individual qualifies as a statutory employee under section 3121(d) (3) only if the individual is not a common law employee pursuant to section 3121(d) (2).

Petitioner alleges that as an employee of a foreign Government, he is self-employed pursuant to section 3121(b) (11) and is treated as his own employee under section 401(c) (1) and (2)." Next, he contends that even if the Court concludes that "Sec.

.We hold, for respondent, that petitioner is not entitled to any section 31 credit in excess of what has been allowed .

Holland mailed to petitioner a Summary of Issues, which concluded, inter alia, that petitioner's medical transcriptionists were statutory home workers pursuant to section 3121(d) (3) (C) and that petitioner was not entitled to act section 530 relief because it had not established that it reasonably relied on one of the act section 530 safe harbors or had any other reasonable basis for treating its medical transcriptionists as independent contractors.

We hold that United may deduct the per diem allowances under section 162(a)(1) as personal service compensation.

224, 231–32 (2018). II. Analysis A. The Nurses’ Legal Classification Employers are subject to “employment taxes,” which include taxes imposed by FICA and FUTA, and income tax withholding under section 3402. Employers must make periodic deposits of amounts withheld from employees’ wages and amounts corresponding to the employer’s share of FICA and FUTA tax. §§ 6302, 6157; Treas. Reg. §§ 31.6302-1, 31.6302(c)-3. These employment taxes apply only in the case of employees and do not apply to payment

n overstated credit. In considering the Commissioner’s claim with respect to the withheld taxes we stated: Under section 6211(b)(1) a deficiency is determined “without regard to payment on account of estimated tax, without regard to the credit under section 31”. Section 31 generally allows the taxpayer to claim a credit for Federal income tax withheld from wages for that taxable year. The amount of an overstated credit may be summarily assessed and is not subject to deficiency procedures. * * *

Under section - 44 - [*44] 6654(e)(1), the section 6654(a) addition to tax does not apply ifthe tax shown on the return for the taxable year (or, ifno return is filed, the tax)--as reduced by the credit allowable under section 31 (i.e., a wage withholding credit)--is less than $1,000. As Adams is considered not to have filed a return for purposes ofsection 6654, he will qualify for the section 6654(e)(1) exception ifhis tax liability for 2004, reduced by any section 31 credit, is less than $1,0

section 31 .6001-1(e)(2), Employment Tax Regs .--and berates respondent's counsel for not yielding the point .12 It would be odd if a taxpayer could fail to file returns but escape the burden of proof if his trial did not take place within four years ; but in fact the tax law does not reflect 12See Petr.'s Reply Brief 40-41 ("Treasury Reg . 26 CFR

Section 1.6664-2(c)(1), Income Tax Regs., interprets the definition of “underpayment” in section 6664 by stating that the tax shown on the return is reduced by the excess of: (i) The amounts shown by the taxpayer on his return as credits for tax withheld under section 31 (relating to tax withheld on wages) * * * over (ii) The amounts actually withheld, * * * with respect to a taxable year before the return is filed for such taxable year.

To support his assertion that his Pension Plan payments and Social Security benefits were exempt from Federal income tax, petitioner cited section 31.3401(a)(9)-1, Employment Tax Regs.

31.6011(a)-3, Employment Tax Regs. We hold petitioners are not entitled to any deductions under section 162(a) for the corporate employment taxes and interest thereon they paid the IRS out of their own pockets. We now address issues 1 and 2 in detail. A. Ownership of the Corporate Employment Tax Funds; Right to Deduction for the Corporate Empl

31.3401(c)-1(d), Employment Tax Regs. Section 31.3401(c)-1(b), Employment Tax Regs., defines the employer/employee relationship as follows: Generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the r

After several exchanges, the Commissioner finally issued new notices ofdetermination in which he upheld the levy in full for 5 We discuss it more in the other Opinion in this case that we are also filing today, but it is useful to highlight that the Code treats any amount for which a taxpayer is credited under section 31 as paid on the original due date ofthe return, not when it is actually made.

In the Watson, Inc., letter, petitioner states that he is providing the letter to Watson, Inc., for its records, pursuant to section 31.3402(n)- 1, Employment Tax Regs.

In the Watson, Inc., letter, petitioner states that he is providing the letter to Watson, Inc., for its records, pursuant to section 31.3402(n)- 1, Employment Tax Regs.

In the Watson, Inc., letter, petitioner states that he is providing the letter to Watson, Inc., for its records, pursuant to section 31.3402(n)- 1, Employment Tax Regs.

urn. Petitioners are mistaken. The Code provides no deduction from gross income for the plan distribution. See secs. 61 and 62. Rather, it is fully includable in gross income, and any amount withheld as tax would be allowable as a credit pursuant to section 31. See Goins v. Commissioner, T.C. Memo. 1997-521, affd. without published opinion 151 F.3d 1029 (4th Cir. 1998). 1 Petitioners contend that pursuant to sec. 6201(d), respondent bears the burden of producing information to refute petitioners

ces for a corporation and receives remuneration for those services. See Veterinary Surgical Consultants, P.C. v. Commissioner, 117 T.C. 141 (2001), affd. sub nom. Yeagle Drywall Co. v. Commissioner, 54 Fed. Appx. 100 (3d Cir. 2002); sec. 3121(d)(1); sec. 31.3121(d)-1(b), Employment Tax Regs. - 10 - Kovacevich was a statutory employee because at all relevant times he served as petitioner’s president and secretary-treasurer, worked in all significant aspects of petitioner’s business, performed sub

al services for a corporation and receives remuneration for those services. See Veterinary Surgical Consultants, P.C. v. Commissioner, 117 T.C. 141 (2001), affd. sub nom. Yeagle Drywall - 10 - Co. v. Commissioner, 54 Fed. Appx. 100 (3d Cir. 2002); sec. 31.3121(d)-1(b), Employment Tax Regs. Petitioner was a statutory employee because at all relevant times he served as Western's president, worked in all significant aspects of Western's business, performed substantial services for Western in his ca

31.3121(d)- 1(b), Employment Tax Regs.] Identical language is also included in regulations promulgated under section 3306. Sec. 31.3306(i)-1(e), Employment Tax Regs. B. Section 530 of the Revenue Act of 1978 Section 530 operates in enumerated circumstances to afford relief from employment tax liability, notwithstanding the actual relationship

31.3121(d)- 1(b), Employment Tax Regs.] Identical language is also included in regulations promulgated under section 3306. Sec. 31.3306(i)-1(e), Employment Tax Regs. B. Section 530 of the Revenue Act of 1978 Section 530 operates in enumerated circumstances to afford relief from employment tax liability, notwithstanding the actual relationship

31.3121(d)- 1(b), Employment Tax Regs.] - 8 - Identical language is also included in regulations promulgated under section 3306. Sec. 31.3306(i)-1(e), Employment Tax Regs. B. Section 530 of the Revenue Act of 1978 Section 530 operates in enumerated circumstances to afford relief from employment tax liability, notwithstanding the actual relati

31.3121(d)- 1(b), Employment Tax Regs.] Identical language is also included in regulations promulgated under section 3306. Sec. 31.3306(i)-1(e), Employment Tax Regs. B. Section 530 of the Revenue Act of 1978 Section 530 operates in enumerated circumstances to afford relief from employment tax liability, notwithstanding the actual relationship

orporation who as such does not perform any services or performs only minor services and who neither receives nor is entitled to receive, directly or indirectly, any remuneration is considered not to be an - 8 - employee of the corporation. * * * [Sec. 31.3121(d)- 1(b), Employment Tax Regs.] Identical language is also included in regulations promulgated under section 3306. Sec. 31.3306(i)-1(e), Employment Tax Regs. B. Section 530 of the Revenue Act of 1978 Section 530 operates in enumerated circ

31.3121(d)- 1(b), Employment Tax Regs.] Identical language is also included in regulations promulgated under section 3306. Sec. 31.3306(i)-1(e), Employment Tax Regs. B. Section 530 of the Revenue Act of 1978 Section 530 operates in enumerated circumstances to afford relief from employment tax liability, notwithstanding the actual relationship

R issued to P a Notice of Determination Concerning Worker Classification Under Sec. 7436, determining that A was an employee of P for purposes of Federal employment tax. Held: A is an employee of P for purposes of Federal employment tax pursuant to sec. 31.3121(d)-(1)(b), Employment Tax Regs., because A is an officer who performs substantial services for P and receives remuneration for those services. - 2 - Held, further, P is not entitled to relief pursuant to sec. 530 of the Rev. Act of 1978,

7701(b)(1)(B)} under United States Tax Laws [Title 26 United States Code and the Internal Revenue Code][.] 26 CFR Sec 31.3401(a)(6)-1(b) “Remuneration paid to a nonresident alien individual...is exempted from wages and hence is not subject to withholding.” Petitioners issued to Susan Thomas Barmes and to Jennifer Burgess16 Form W-2, Wage and Tax Statement (Form W-2), for the respective wages that they earned for the period January 1, 1995, through October 12,

Section 6401(b) provides that refundable credits, such as taxes withheld from wages under section 31, exceeding the income tax imposed for each year shall be considered overpayments of tax.

31.3121(d)-1(d)(3)(ii), Employment Tax Regs.3] Neither section 3121(d)(3)(B) nor the regulation just quoted defines “life insurance” or “life insurance contract”. However, section 7702(a) provides that for purposes of the Internal 3 This regulation mirrors the legislative history of sec. 3121(d), which contains almost identical language. See S

Section 31 provides that the amount withheld as income tax on wages shall be allowed to the recipient of the income as a credit against the income tax. For the purpose of the credit, the recipient of the income is the person subject to the income tax imposed under subtitle A upon the wages from which the tax was withheld. Sec. 1.31-1(a), Income Tax

§§ 31.6302-1, 31.6302(c)-3. These employment taxes apply only in the case of employees and do not apply to payments made to independent contractors. See §§ 3121(a), 3401(a). To ensure employers comply with these tax obligations, the Internal Revenue Service (IRS) may audit an employer’s return to determine the employment status of individuals perfor

3.10, § 31 (2009) (Turks & Caicos Is.). The section requires “a written statement or account” which is misleading, false, or deceptive. Id. While petitioners have not cited this section, its requirement that the fraudulent statement be written weakens their claim of a theft under Turks and Caicos law (a deceptive written statement is absent from the reco

§ 31.6051-1(a)(1)(i). For these purposes wages include all remuneration for services performed by an employee, including the cash value of all remuneration paid in a medium other than cash. I.R.C. § 3401(a). Here petitioner contends that, although his employer, TAXPAYER1, made no such withholding for gift certificates and did not report the amount

§§ 31.6302-1, 31.6302(c)-3. These employment taxes apply only in the case of employees and do not apply to payments made to independent contractors. See §§ 3121(a), 3401(a). To ensure compliance with these tax obligations, the Internal Revenue Service (IRS) may audit an employer to determine the employment status of individuals performing services f

Code § 31-39-8-4 (2005), Roman and Lynnette requested the Pulaski Circuit Court to invalidate the following substantiations by DCS against them: (1) a December 5, 2005, substantiation of medical neglect for J.S. based on the postponement of a cardiology checkup; (2) a March 23, 2007, substantiation that J.S.’s death was caused by physical abuse; and (3)

31.3121(b)(10)-2(d)(3)(iii) (2005), a regulation which, like 26 C.F.R. sec. 1.482-1(h)(2) (2006), was promulgated pursuant to sec. 7805(a). The National Muffler test was a multifactor test, as can be seen by the following text from National Muffler Dealers Assn., 440 U.S. at 477: In determining whether a particular regulation carries out the c

epard v. Shepard, 129 N.W. 201, 208 (Mich. 1910); Davis v. Zimmerman, 40 Mich. 24, 27 (1879). As the term itself suggests, manually providing tangible property to the donee is the classic form of delivery. See, e.g., Restatement (Second) of Property § 31.1 cmt. b (Am. L. Inst. 1992) (describing the “simplest” form of delivery as the donor’s (questioning purported date of contribution where “the original handwritten date in a printed box entitled ‘date of donation’ . . . had been completely scrat

§ 1.6664-2(a).7 Treasury Regulation § 1.6664-2(b) provides that the “tax imposed” is determined without regard to credits for tax withheld on wages under section 31 (or credits for tax withheld under section 33,8 or credits for payments of tax, or credits for payments of estimated tax).

§§ 31.6302-1, 31.6302(c)-3. These employment taxes apply only in the case of employees and do not apply to payments made to independent contractors. We determine a worker’s employment status by applying common law concepts, see I.R.C. §§ 3121(d)(2), 3306(i); see also Weber v. Commissioner, 103 T.C. 378, 386 (1994), aff’d per curiam, 60 F.3d 1104 (4t

§§ 31-6-40 (2009) and 31-6-43 (2012) and Ga. Comp. R. & Regs. 111-8- 63 (2012), and they require the facility to obtain (1) a certificate of need from the Georgia Department of Community Health, Healthcare Facility Regulation Division, Office of Health Planning, Ga. Code Ann. § 31-6-40(a), for which it must first submit a letter of intent to submit

15 [*15] amount shown on the form owing to the government from $115,940 (before credits) to $69,940, which, along with $71,613 claimed on account of a previous payment made with their request for an extension of the time to file, and adding an estimated tax penalty of $1,673, further reduced the amount shown as owing to the government

§§ 31.3121(d)-1(b), 31.3401(c)-1(f). The text of the regulations thus recognizes a longstanding exception from employee status for officers who (1) perform “only minor services” and (2) do not receive and are not entitled to receive remuneration for those services. See United States v. Bernstein, 179 F.2d 105, 109 (4th Cir. 1949) (finding officers n

31.3403-1, Employment Tax Regs. For all years at issue in these cases, the Commissioner argues that the firm did not pay employment taxes on all the wages that Ward received. The disagreement is largely about what the firm calls the “officer compensation” that it paid Ward.8 7 The employer typically pays the employee’s portion with money withh

Section 31.3121(d)-1(b), Employment Tax Regs., limits that category as follows: (b) Corporate officers.--Generally, an officer of a corporation is an employee of the corporation. However, an officer of a corporation who as such does not perform any services or performs only minor services and who neither receives nor is entitled to receive, directl

31.3403-1, Employment Tax Regs. For all years at issue in these cases, the Commissioner argues that the firm did not pay employment taxes on all the wages that Ward received. The disagreement is largely about what the firm calls the “officer compensation” that it paid Ward.8 7 The employer typically pays the employee’s portion with money withh

Section 6211(b)(1) in turn provides that "the tax imposed * * * and the tax shown on the return shall both be determined * * * without regard to credit under section 31." Section 31, captioned "Tax withheld on wages," provides: "The amount withheld as tax [by an employer] under chapter 24 shall be allowed to the recipient ofthe income as a credit against the [income] tax." Sec.

§31.3401(a)-4(b), ifa reimbursement or other expense allowance arrangement does not satisfy the requirements of section 62(c) and §1.62-2, all amounts paid under the arrangement are - 16 - [*16] treated as paid under a non-accountable plan, are included in wages, and are subject to withholding and payment ofemployment taxes when paid. Your plan se

Instead, the revised regulation provides that the CFC "will have manufactured * * * [the product] only if" the CFC meets specified new re- quirements "through the activities ofits employees" as defined for FICA purposes.

Dunlap chose subdivision (i)(C)(1) because it contains a reference to section 31.3121(v)(2)-1(c)(2)(i) and (1)(iii)(B), Employment Tax Regs., which she relies on in one ofher arguments.

Specifically, section 31.3121(d)-1(c)(2), Employment Tax Regs., provides for FICA tax purposes the following: 7Employers report (on Form 940) and pay FUTA tax on a calendar year basis.

Instead, the revised regulation provides that the CFC "will have manufactured * * * [the product] only if" the CFC meets specified new re- quirements "through the activities ofits employees" as defined for FICA purposes.

31.6071(a)-1(a)(1), Employment Tax Regs. For purposes ofthe deadline for assessing tax, ifthe Form 941 is filed on or before April 15 ofthe year after the quarter in question, then the Form 941 is deemed filed on that April 15. Sec. 6501(b)(2). Thus, in such a situation the deadline for assessing the trust-fund-recoverypenalty is three years a

In their motion for leave they contended that payments in the first category were deductible under section 164 and that payments in the second category should be credited dollar-for-dollar against their Federal income tax liabilities under section 31(a) (credit for tax withheld from wages) or other- wise.

ules say that "any officer ofa corporation" is an employee except one who "does not perform any services or performs only minor services and who neither receives nor is entitled to receive, directly or indirectly, any remuneration." Sec. 3121(d)(1); sec. 31.3121(d)-1(b), Employment Tax Regs.; see also Pariani, 1997 WL 582144, at *2-*3; Jacobs, 1993 WL 495594, at *2. Burbach is BAI's sole shareholder and president; the record indicates his hands-on involvement in the company's day-to- day affairs

ules say that "any officer ofa corporation" is an employee except one who "does not perform any services or performs only minor services and who neither receives nor is entitled to receive, directly or indirectly, any remuneration." Sec. 3121(d)(1); sec. 31.3121(d)-1(b), Employment Tax Regs.; see also Pariani, 1997 WL 582144, at *2-*3; Jacobs, 1993 WL 495594, at *2. Burbach is BAI's sole shareholder and president; the record indicates his hands-on involvement in the company's day-to- day affairs

In their motion for leave they contended that payments in the first category were deductible under section 164 and that payments in the second category should be credited dollar-for-dollar against their Federal income tax liabilities under section 31(a) (credit for tax withheld from wages) or other- wise.

In their motion for leave they contended that payments in the first category were deductible under section 164 and that payments in the second category should be credited dollar-for-dollar against their Federal income tax liabilities under section 31(a) (credit for tax withheld from wages) or other- wise.

910 (1959). 23Respondent concedes that $282,000 ofthe gross receipts reported for 2005 was deposits made for sales that occurred in 2006. 24Petitioners contend that SRI had a $150,000 basis in each lot in the Sterling Ridge subdivision, which would result in a 2005 cost ofgoods sold for SRI of$3.3 million. The $150,000 basis per lot depen

910 (1959). 23Respondent concedes that $282,000 ofthe gross receipts reported for 2005 was deposits made for sales that occurred in 2006. 24Petitioners contend that SRI had a $150,000 basis in each lot in the Sterling Ridge subdivision, which would result in a 2005 cost ofgoods sold for SRI of$3.3 million. The $150,000 basis per lot depen

31.6051-2(a), Employment Tax Regs. An employer must (continued...) - 7 - [*7] firm's employees. The amounts on each entity's Form W-3 and Forms W-2 generally correspond to the amounts recorded in each entity's general ledger for wages and employmenttaxes paid for that year. Specifically, Emery LLP's Form W-3 reported total wages paid of$13,45

services for a corporation and who receives remuneration in any form for those services is considered an employee, whose wages are subject to Federal employmenttaxes." Veterinary Surgical Consultants, P.C., 117 T.C. at 145; see also sec. 3121(d)(1); sec. 31.3121(d)-1(b), Employment Tax Regs. An employer can avoid employment-tax liability by showing three things: ¹² One ofthe payments was for $35,000 in settlement ofa collections action by Wells Fargo. Povolny, PG, Archetone Limited, and Archeton

31.3121(a)-1(i), Employment Tax Regs.; see also sec.

n 2010 (i.e., the quarters that ended on March 31, June 30, and September 30, 2010). Hollywood Arts was required to file Form 941 for each ofthose quarters by no later than the end ofthe month following each such quarter. See secs. 6011(a), 6071(a); sec. 31.6011(a)-4T(a)(1), Temporary Employment Tax Regs., 73 Fed. Reg. 79358 (Dec. 29, 2008); sec. 31.6071(a)-1(a)(1), Employment Tax Regs. Hollywood Arts filed timely Form 941 for each ofthe quarters that ended on March 30 and September 30, 2010. It

910 (1959). 23Respondent concedes that $282,000 ofthe gross receipts reported for 2005 was deposits made for sales that occurred in 2006. 24Petitioners contend that SRI had a $150,000 basis in each lot in the Sterling Ridge subdivision, which would result in a 2005 cost ofgoods sold for SRI of$3.3 million. The $150,000 basis per lot depen

services for a corporation and who receives remuneration in any form for those services is considered an employee, whose wages are subject to Federal employmenttaxes." Veterinary Surgical Consultants, P.C., 117 T.C. at 145; see also sec. 3121(d)(1); sec. 31.3121(d)-1(b), Employment Tax Regs. An employer can avoid employment-tax liability by showing three things: ¹² One ofthe payments was for $35,000 in settlement ofa collections action by Wells Fargo. Povolny, PG, Archetone Limited, and Archeton

910 (1959). 23Respondent concedes that $282,000 ofthe gross receipts reported for 2005 was deposits made for sales that occurred in 2006. 24Petitioners contend that SRI had a $150,000 basis in each lot in the Sterling Ridge subdivision, which would result in a 2005 cost ofgoods sold for SRI of$3.3 million. The $150,000 basis per lot depen

910 (1959). 23Respondent concedes that $282,000 ofthe gross receipts reported for 2005 was deposits made for sales that occurred in 2006. 24Petitioners contend that SRI had a $150,000 basis in each lot in the Sterling Ridge subdivision, which would result in a 2005 cost ofgoods sold for SRI of$3.3 million. The $150,000 basis per lot depen

services for a corporation and who receives remuneration in any form for those services is considered an employee, whose wages are subject to Federal employmenttaxes." Veterinary Surgical Consultants, P.C., 117 T.C. at 145; see also sec. 3121(d)(1); sec. 31.3121(d)-1(b), Employment Tax Regs. An employer can avoid employment-tax liability by showing three things: ¹² One ofthe payments was for $35,000 in settlement ofa collections action by Wells Fargo. Povolny, PG, Archetone Limited, and Archeton

ertain longstanding regulations that were not at issue in Mayo Found. allowed the student FICA tax exemption under section 3121(b)(10) to students - 30 - who worked for their schools "as an incident to and for purposes ofpursuing a course ofstudy." Sec. 31.3121(b)(10)-2(d), Employment Tax Regs; see Mayo Found., 562 U.S. at 49. A determination ofwhether an individual's work was "incident" to the individual's studies had been made under those regulations on a case-by-case analysis. That case-by-ca

(a) as-- the amount by which the tax imposed by subtitle A * * * exceeds the excess of-- (1) the sum of (A) the amount shown as the tax by the taxpayer upon his return, * * * plus (B) the amounts previously assessed (or collected without assessment) as a deficiency, over-- (2) the amount ofrebates, as defined in subsection (b)(2), made.

1989-517; see also Mitchell v.

Section 23(1) ofthe Act provides that the financial provision can take the form ofperiodical payments, secured periodical payments, or a lump-sum payment to the other spouse.

1989-517; see also Mitchell v.

kers whom it improperly labeled as contractors. But it sees a way out: Section 3402 lets an employer in this situation escape tax liability ifit can show the workers whom it labeled independent contractors paid income tax on their earnings. See also sec. 31.3402(d)-1, Employment Tax Regs. One way to do this would be for the Tribe to ask each worker to complete Form 4669, Statement ofPayments Received. Internal Revenue Manual pt. 4.23.8.4 (Oct. 26, 2015). The Tribe tried to dojust that, but it wa

certain income from gross income on his 2012 return; (2) petitioner's timely submitted unsigned 2012 return, which respondent returned to him, is sufficient to avert the addition to tax for late filing under section 6651(a)(1); (3) petitioner is liable for an accuracy-related penalty under section 6662(a); and (4) this Court has jurisdiction over section 31 payments and credits and, ifso, whether petitioner overstated his withholding credits.

31.3121(d)-1(a)(3), Employment Tax Regs. -10- [*10] 1. Enumerated Factors This Court has enumerated the following factors in determining whether an employee-employerrelationship exists: (1) the degree ofcontrol exercised by the principal over the details ofthe work; (2) which party invests in the facilities used in the work; (3) the opportuni

Proc. - 100 - 75-21, 1975-1 C.B. 715. In 1984 Congress enacted what has become known as the "Pickle rule", which subjected property leased to a tax-exempt entity to unfavorable depreciation rules. Deficit Reduction Act of 1984, Pub. L. No. 98- 369, sec. 31, 98 Stat. at 509. The unintended consequence ofthe Pickle rule was the proliferation of LILO transactions with tax-exempt entities. LILO transactions were designed to work around the Pickle rule because the taxable party leased the property fr

Proc. - 100 - 75-21, 1975-1 C.B. 715. In 1984 Congress enacted what has become known as the "Pickle rule", which subjected property leased to a tax-exempt entity to unfavorable depreciation rules. Deficit Reduction Act of 1984, Pub. L. No. 98- 369, sec. 31, 98 Stat. at 509. The unintended consequence ofthe Pickle rule was the proliferation of LILO transactions with tax-exempt entities. LILO transactions were designed to work around the Pickle rule because the taxable party leased the property fr

Section 31.3401(a)-2(b)(1) ofthe regulations under that section distinguishes between those public officials compensated by fees and those who receive salaries from the government: (b) Fees paid a public official.--(1) Authorized fees paid to public officials such as notaries public, clerks ofcourts, sheriffs, etc., for services rendered in the per

31.3121(d)-1(c)(2), Employment Tax Regs.; see Sargent v. Commissioner, 929 F.2d 1252, 1256 (8th Cir. 1991) ("Accordingly, within Regulation § 31.3121(d)-1(c)(2), two necessary elements must be met before the corporation * * * may be considered the true controller ofthe service-provider."), rev'g 93 T.C. 572 (1989). Because both elements must b

31-16-6-6 (LexisNexis 2007 & Supp. 2015) (before its amendment effective July 1, 2012, lowering the operative age from 21 years to 19 years); Hirsch v. Oliver, 970 N.E.2d 651 (Ind. 2012). Thus, for 2009 Christel Eichinger would have been the custodial parent. See sec. 152(e)(4)(A); sec. 1.152-4(d)(1), Income Tax Regs. Accordingly, given the ab

The regulations provide that taxes paid by the section 932(c) taxpayerto the Virgin Islands "shall be considered creditable in the same manner as taxes paid to the United States (for example, under section 31) and not as taxes paid to a foreign government (for example, under sections 27 and 901)." M.

- 32 - Section 31.3121(d)-1(c)(2), EmploymentTax Regs., defines the common law employer-employeerelationship as follows: Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the workbut also as to the

31.205-6(i) (2013). - 26 - "decision to grant options to employees * * * does not change its operating expenses" and does not factor into its pricing decisions. C. Final Rule 1. Regulatory Provisions In August 2003 Treasury issued the final rule. The final rule explicitly required parties to QCSAs to share stock-based compensation costs. See

- 32 - Section 31.3121(d)-1(c)(2), EmploymentTax Regs., defines the common law employer-employeerelationship as follows: Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the workbut also as to the

, the effective date ofregulations that created a bright-line rule for distinguishing between students and full-time employees for purposes ofthe student exception to payroll taxes under section 3121(b)(10). See Sloan-Kettering, 563 F.3d at 25 n.2; sec. 31.3121(b)(10)- 2(d)(3)(iii), (e) Example (4), (f), Employment Tax Regs.; see also Mayo Found. for Med. Educ. & Research v. United States, 562 U.S. 44 (2011) (holding the regulations that apply to services performed on or after April 1, 2005, val

equired to be deducted and withheld. Compare Va. Code Ann. sec. 58.1-390.2 with sec. 3403. Under both the Virginia and Federal statutes, the withheld tax is allowed as a credit against the tax imposed. Compare Va. Code Ann. sec. 58.1- 486.2(E) with sec. 31. We have often observed that there is only one Federal income tax but there are two separate collection mechanisms: (1) from the employerpursuant to section 3402 or section 3403 and (2) from the employee, generally pursuantto sections 1, 61(a)

- 32 - Section 31.3121(d)-1(c)(2), EmploymentTax Regs., defines the common law employer-employeerelationship as follows: Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the workbut also as to the

- 32 - Section 31.3121(d)-1(c)(2), EmploymentTax Regs., defines the common law employer-employeerelationship as follows: Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the workbut also as to the

- 32 - Section 31.3121(d)-1(c)(2), EmploymentTax Regs., defines the common law employer-employeerelationship as follows: Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the workbut also as to the

- 32 - Section 31.3121(d)-1(c)(2), EmploymentTax Regs., defines the common law employer-employeerelationship as follows: Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the workbut also as to the

31.6071(a)-1(a)(1), Employment Tax Regs. Petitioner filed its Form 941 for that period on August 3, 2007.¹8 Nevertheless, we have found that there was no employment tax deficiency for that quarter. Respondent does not argue that, ifthere was no deficiency in tax, payments were not made timely, which we assume they were. Therefore section 6651(

necessary to find employee status varies according to the nature ofthe services provided." Weber, 103 T.C. at 388 (noting that employer "need not stand over the employee and direct [his] every move" in order to exercise the requisite control); see sec. 31.3401(c)-1(b), Employment Tax Regs. ("[I]t is not necessary that the employer actually direct or control the manner in which the services are performed; it is sufficient ifhe has the right to do so."). We conclude here, as we concluded in Gilli

31.205-6(i) (2013). - 26 - "decision to grant options to employees * * * does not change its operating expenses" and does not factor into its pricing decisions. C. Final Rule 1. Regulatory Provisions In August 2003 Treasury issued the final rule. The final rule explicitly required parties to QCSAs to share stock-based compensation costs. See

- 32 - Section 31.3121(d)-1(c)(2), EmploymentTax Regs., defines the common law employer-employeerelationship as follows: Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the workbut also as to the

31.6071(a)-1(a)(1), EmploymentTax Regs. The taxes reportable on the Form 941 must be paid on or before the date the Form 941 is to be filed. S_e_e sec. 6151(a)(ataxpayerwho is required to file a tax -29- [*29] return must pay the tax at the time and place fixed for filing the return). Thus, the taxes are due one month after the end ofthe quar

31.3401(c)-1(a) and (b), EmploymentTax Regs.; Atl. CoastMasonry, Inc. v. Commissioner, T.C. Memo. 2012-233. A. Petitioner's Corporate Officers An officer ofa corporation who performs more than minor services and re- ceives remuneration for such services is a "statutory" employee for employment tax purposes. See Joseph M. Grey Pub. Accountant,

2,972 15,621 Gross rents 7,200 2,800 10,000 Form 4797 net gain -0- 2,000 2,000 Other income -0- 3 3 Total income 575,500 43,439 618,940 Officers' comp. 50,000 -0- 50,000 Repairs/maintenance 29,156 54,538 83,693 ¹(...continued) 22770 (June 16, 1987); sec. 31.3121(d)-1(b), EmploymentTax Regs. 2Dollar discrepancies for both the 2Ó06 and 2007 tables result from rounding ofthe monetary amounts to the nearest dollar. - 6 - Rents 1,000 2,796 3,796 Taxes/licenses 15,830 14,229 30,059 Depreciation 9,824

See generally Marine v.

31.3401(c)-1(b), (d), Employment Tax Regs. We do not analyze in depth all ofthe factors enumerated in the regulations and cases but rather focus on some ofthe more important ones that inform our decision. Factors that are particularly relevant in determining the substance ofan employment relationship include: (1) the degree ofcontrol exercised

31.6302-1(a), Employment Tax Regs. A monthly depositor must make deposits monthly. Sec. 31.6302-1(c)(1), EmploymentTax Regs. A semiweekly depositormust make deposits semiweekly. Sec. 31.6302-1(c)(2), Employment Tax Regs. 4 Not all ofthe deposits were timely. For example, one ofpetitioner's deposits for the period ending September 30, 2002, was

31.3121(s)-1, EmploymentTax Regs. This allows the group ofcompanies to be treated as a single employer, which prevents them from having to pay more in total Social Security and Medicare taxes than a single employer would have to pay. Id. The firm that's chosen to be the common paymasterpays all employees, files information and tax returns, and

. 2012-321; Mandeville v. Commissioner, T.C. Memo. 2007-332. "Under sec. 6654(e)(1), the sec. 6654(a) addition to tax does not apply if the tax shown on the return for the taxable year (or, ifno return is filed, the tax), reduced by the credit under sec. 31, is less than $1,000. - 15 - [*15] frivolous or groundless; or (3) the taxpayerunreasonably failed to pursue available administrative remedies. A taxpayer's position is frivolous or groundless ifit is "'contrary to established law and unsuppo

Section 31.3121(d)-1(b), Employment Tax Regs., limits that category as follows: (b) Co orate officers. Generally, an officer ofa corporation · is an employee ofthe corporation. However, an officer ofa corporation who as such does not perform any services or performs only minor services and who neither receives nor is entitled to receive, directly o

31.3121(d)-1(b), Employment Tax Regs.; see Veterinary Surgical Consultants, P.C. v. Commissioner, 117 T.C. 141, 144-145 (2001), aff'd sub nom. Yeagle Drywall Co., Inc. v. United States, 54 Fed. Appx. 100 (3d Cir. 2002). In general, an S corporation shareholder is taxed on the shareholder's pro rata share ofthe corporation's income, regardless

he parties believe they were creating; and (8) the provision ofemployee benefits. NLRB v. United Ins. Co., 390 U.S. 254, 258-260 (1968); Ewens & Miller, Inc. v. Commissioner, 117 T.C. 263, 270 (2001); Weber v. Commissioner, 103 T.C. at 387; see also sec. 31.3121(d)-1(c)(2), Employment Tax Regs. (setting forth criteria for identifying employees under common law rules). All ofthe facts and circumstances are considered, and no one factor dictates the outcome. Ewens & Miller. Inc. v. Commissioner, 1

In Feller the Court addressed the question ofhow overstated withholding credits under section 31 fit within the definition ofan underpaymentunder section 6664.

31.3121(s)-1, EmploymentTax Regs. This allows the group ofcompanies to be treated as a single employer, which prevents them from having to pay more in total Social Security and Medicare taxes than a single employer would have to pay. Id. The firm that's chosen to be the common paymasterpays all employees, files information and tax returns, and

taxpayerthereon, plus - 7 - [*7] (B) the amounts previously assessed (or collected without assessment) as a deficiency, over-- (2) the amount ofrebates * * * made. Because the amount ofa deficiency is determined "without regard to the credit under section 31",6 sec. 6211(b)(1), we will not consider petitioner's with- holding credit argument in determining whether to grant respondent's motion. In addition to petitioner's withholding credit argument, petitioner advances in petitioner's response c

31.3121(a)-1(c), Employment Tax Regs.; see also Charlotte's Office Boutique, Inc. v. Commissioner, 121 T.C. 89, 104 (2003), affd, 425 F.3d 1203 (9th Cir. 2005). An officer who performs more than minor services for a corporation and who receives remuneration in any form - 8 - [*8] for those services is considered an employee, and his or her wa

s "the amount oftax imposed on the taxpayerunder subtitle A for the taxable year".4 This amount is determinedwithout regard to credits for tax 4Federal income taxes are imposed under subtit. A ofthe Code. Social (continued...) - 7 - withheld under section 31. Sec. 1.6664-2(b)(1), Income Tax Regs. The amount of tax imposed on petitioner under subtitle A for the 2007 taxable year was $12,968. 2. The amount oftax shown on the return Section 6664(a)(1)(A) instructs us to determine the "amount shown

Section 31.3121(d)-1(b), Employment Tax Regs., limits that category as follows: (b) Co orate officers. Generally, an officer ofa corporation · is an employee ofthe corporation. However, an officer ofa corporation who as such does not perform any services or performs only minor services and who neither receives nor is entitled to receive, directly o

In Feller the Court addressed the question of how overstated withholding credits under section 31 fit within the definition of an underpayment under section 6664.

ed Section 1.6664-2(b), Income Tax Regs., provides that the amount of income tax imposed is “the amount of tax imposed on the taxpayer under subtitle A for the taxable year”. This amount is determined without regard to credits for tax withheld under section 31. Sec. 1.6664-2(b)(l), Income Tax Regs. The amount of tax imposed on petitioner under subtitle A for the 2007 taxable year was $12,968. 2. The amount of tax shown on the return Section 6664(a)(1)(A) instructs us to determine the “amount sho

31.6302-1(a) (2005), states: "An employer must generally deposit employrienttaxes [a term defined to include all three types of employment taxes] under one oftwo rules: the Monthly rule * * * or the.Semi- Weekly rule". Although this regulation was amended by T.D. 9239, 2006-1 C.B. 401, the amendment does not change the rule about the timing of

31.3401(c)-1(b), Employment Tax Regs. Similarly, the principal need not set the worker's hours or supervise every detail of the work environment to control the worker. Gen. Inv. Corp. v. United States, 823 F.2d 337, 342 (9th Cir. 1987). Setting their own hours does not necessarily make workers independent contractors. See United States v. Silk

31.3121(d)-1(a)(3), Employment Tax Regs. As stated supra p. 3, petitioner now concedes that its corporate officers (i.e., the Dempseys) were its employees. We thus are left to decide the legal employment classification ofthe masons and laborers. Whether an individual is an employee or an independent contractor is a factual question to which co

l Security and Medicare payments and withholding and, therefore, do not withhold from employees nor pay the employer's share ofthose taxes. See sec. 3121(b)(15). Moreover, those employers withhold no employee Federal income tax. See sec. 3401(a)(5); sec. 31.3401(a)(5)-1(b), EmploymentTax Regs. Thus, U.S. citizen employees ofinternational organizations are required to report income from employmentby the organization as self-employment income, and they are liable for self-employmenttax in addition

31.03(b) provides that "[a]ppropriation ofproperty is unlawful if: (1) it is without the owner's effective consent".

31.3401(c)-1(d), Employment Tax Regs. Relevant factors in determining whether a worker is an employee or an independent contractor include (1) the degree ofcontrol exercised by the principal over the details ofthe work, (2) which party invests in the facilities used in the work, (3) the opportunity ofthe individual for profit and loss, (4) whe

Under section 6513(b)(1), a taxpayer's wage withholdings are deemed to have been paid "on the 15th day ofthe fourth month following the close ofhis taxable year with respect to which such tax is allowable as a credit under section 31"; i.e., on April 15, 2002.

31-16-6-1.5(d)(LexisNexis Supp. 2012); Biscoe v. Biscoe, 443 N.W.2d 221, 224-25 (Minn. Ct. App. 1989). Similarly, in Louisiana, the courts cannot allocate the dependency exemption to a noncustodial parent if (continued...) - 40 - such a requirement, the majority's holding will allow a custodial spouse who refuses to sign a Form 8332 in violat

at 984 (quotmg section 31.3121(d)- 1(c)(2), Employment Tax Regs.).

control, the principal need not actually direct or control the manner in which the services are performed; it is sufficient if the principal has the right to do so. Weber v. Commissioner, 103 T.C. at 388; Potter v. Commissioner, T.C. Memo. 1994-356; sec. 31.3401(c)-1(b), Employment Tax Regs. A business can retain the requisite control over the details ofa - 8 - worker's service without having to stand over the worker and direct every move made by that worker. Prof'l & Exec. Leasing, Inc. v. Comm

31— 16-6-1.5(d) (LexisNexis Supp. 2012); Biscoe v. Biscoe, 443 N.W.2d 221, 224—25 (Minn. Ct. App. 1989). Similarly, in Louisiana, the courts cannot allocate the dependency exemption to a noncustodial parent if there are any outstanding child support payments owed to the custodial parent. La. Rev. Stat. Ann. sec. 9:315.18(B)(1)(a) (2008). Thoug

31.6302-1T(f) (4) (i), Temporary Employment Tax Regs., 73 Fed. Reg. 79360 (Dec. 29, 2008). Respondent submitted into evidence a Form 4340 for the second quarter of 2009. Petitioner filed Form 941 and remitted tax due of $2,591 on July 31, 2009. Respondent assessed a failure to deposit penalty of $259 on August 3, 2009. Petitioner argues that t

er alia, "an officer of a corporation." Sec. 3401(c). The term also includes "every individual performing services if the relätionship between him and the person for whom he performs such services is the legal relationship of employer and employee." Sec. 31.34Ø1(c)-1(a), Employment Tax Regs. The existence of an employer-employee relationship for income tax withholding purposes is determined generally tur reference to the usual.common law rules applicable in determining such relationships. See se

02), affd. 93 Fed. Appx. 473 (3d CØr. 2004). - 10 - reference to section 3121(d) except.for section 3121(d) (4) and (d) (3) (B) and (C)); sec. 3401(c) (including officers of a corporation in the definition of "employee" for income-tax withholding); sec. 31.3121(d)-1(b), Employment Tax Regs.; see also Ewens & Miller, Inc. v. Commissioner, 117 T.C. at 269; Donald G. Cave a Profl. Law Corp. v. Commissioner, T.C. Memo. 2011-48. The IRS asserts that DuFresne and Roberts were statutory employees becau

Section 31 generally allows the taxpayer to claim a credit for Federal income tai withheld from wages for that taxable year." The amount ofe an overstated credit may be. summa ily assessed and is not subject to deficiency procedures. Sec. 6201(a) (3) ; Bregin v. Commissioner, 74 T.C. 1097, 1104-1105 (1980) ("[T]here is no indichtion t

The Mayo Effect We pause here to observe that the Supreme Court recently rejected a taxpayer challenge to section 31.3121(b) (10)-2, Employment Tax Regs., promulgated by the Treasury Department to define the word "student" in section 3121(b) (10).

me Tax Regs., provides that in making the above computation "the 'amount shown as the tax by the taxpayer on his return'" is-reduced by the excess of: (i) The amounts shown by the-taxpayer on his (cid:16)042 return as credits for tax withheld under.section 31 (relating to tax withheld on wages) * * * over (ii) The amounts actually withheld, actually paid as estimated tax, or actually paid with respect to a taxable year before the return is filed for such taxable year.

me Tax Regs., provides that in making the above computation "the 'amount shown as the tax by the taxpayer on his return'" is-reduced by the excess of: (i) The amounts shown by the-taxpayer on his (cid:16)042 return as credits for tax withheld under.section 31 (relating to tax withheld on wages) * * * over (ii) The amounts actually withheld, actually paid as estimated tax, or actually paid with respect to a taxable year before the return is filed for such taxable year.

226, .241 (2002) ; see also Commissioner v .

The credit under section 31 for withholding tax payments , is specifically excluded from the computation of a deficiency .

Under section 6654(e), a section 6654(a) addition to tax does not apply if the tax shown on the taxpayer's return for the year in question (or, if no return is filed, the taxpayer's tax for that year), reduced by the credit allowable by section 31, is less than $1,000.

- 11 - Section 1.6664-2(c) (1), Income Tax Regs., interprets the definition of "underpayment" in section 6664 by stating that -the tax shown on the return -is reduced by the excess of: (i) The amounts shown by the taxpayer on his return as credits for tax withheld under section 31 (relating to tax withheld on wages) * * * over (ii) The amounts actually withheld, * * * with respect to a taxable year before the return is filed for suoh taxable year.

Thus, section 6211(b)(1) provides that?"[t]he tax imposed by subtitle A and the tax shown on the return shall both be determined * * * without regard to the credit under section 31" (i .e ., the credit - 10 - for income tax withheld from wages) ;6 and the regulations under .section 6211 provide : For example, assume that the amount of income tax shown by the taxpayer upon his return for the taxable year is $600 and the amount claimed as a credit under section 31 for income tax withheld at the so

In pertinent part, section 31 .3302(b)-2(b), Employment Tax Regs ., provides that the additional credit shall not be allowed unless the taxpayer submits To the district director a certificate of the proper officer of each State (with respect to the law of which the additional credit is .claimed) showing for the taxpayer-- (1) The total remuneration with respect to w

For purposes of applying section 6654, credits allowed under section 31 for tax withheld on wages are deemed payments of estimated taxes.

31 .3401(a)(5)-1(a)(2), Employment TaxRegs . That is, foreign governments are exempt from income tax withholding whether or not the State Department has certified reciprocity . 14( continued ) . . . S . Rept . 734, 76th Cong ., 1st Sess . 58, 74 (1939) . 9 - 20 - III . Lack of regulatory guidance on the income tax exemption The income : tax r

relying on a novel interpretation of section 31(a), contends that she is entitled to her community one-half share of a section 31 credit for 2004, even though the income that was taxed was earned by Baxter in 2001 .

.As we understand it, it is petitioner's position that he qualifies for the exception under section 6654(e)(1) (small tax exception) and that therefore he is not liable for the addition to tax under section 6654(a) .10 As pertinent here, that excep- tion provides that no addition to tax will be imposed under section 6654(a) for any taxable year if the tax for that year, reduced by the credit allowable under section 31 for tax with- held, is less than $1,000 .11 Sec .

Section 3406(i) authorizes "such regulations as may be necessary or appropriate to carry out the purposes of this section ." Promulgated regulations are outlined at section 31 .3406-0, Employment Tax Regs ., and appear as sections 31 .3406(a)-l through 31 .3406(j)-l, Employment Tax Regs .

Commissioner, supra at 103 ; see also sec .

hall apply to proceedings brought under this section in the same manner as if the Secretary’s determination described in subsection (a) were a notice of deficiency.” 9We also have jurisdiction in a deficiency proceeding to make a determination under sec. 31, which allows a credit against income tax for the withholding of excess employment tax as a result of the taxpayer’s having received wages from more than one employer. See Chatterji v. Commissioner, 54 T.C. 1402, 1405-1406 (1970); Else v. Com

Under section 31 .3402( (2) -1T (g) (2) of the Temporary Employment Tax R gulations, we may issue.this letter to notify you that our employee is not entitled to claim a complete'exemp ion from withholding or claim more than the maximum number of withholding allowances shown above . Internal Revenue Manu 1 (IRM) Exhibit 5 .19 .11-2 (May_ .l, 200-6) ; emph

4(d)(1)(B). 39Sec. 6654(e) provides that no addition to tax shall be imposed under sec. 6654(a) for any taxable year if (1) the tax shown in the return for such taxable year (or, if no return is filed, the tax), reduced by the credit allowable under sec. 31, is less than $1,000, sec. 6654(e)(1); (2) the preceding taxable year was a taxable year of 12 months, the individual did not have any liability for such preceding taxable year, and the individual was a citizen or resident of the United State

shall apply to proceedings brought under this section in the same manner as if the Secretary’s determination described in subsection (a) were a notice of deficiency.” We also have jurisdiction in a deficiency proceeding to make a determination under sec. 31, which allows a credit against income tax for the withholding of excess employment tax as a result of the taxpayer’s having received wages from more than one employer. See Chatterji v. Commissioner, 54 T.C. 1402, 1405-1406 (1970); Else v. Com

An individual taxpayer, however, is not entitled to a section 31 credit toward Federal income and employment taxes for taxes not actually withheld from the individual's earnings .

continued) pension distribution, whether creditable under section 31 or any other section, is treated either as a payment of estimated tax pursuant to section 6654(g)(1) or as a credit against tax under section 6654(f) .

Liability for tax The employer shall be liable for the payment of the tax required to be deducted and withheld under this chapter, and shall not be liable to any per- son for the amount of any such payment Treasury Regulation § 31.3403-1 Liability for tax Every employer required to deduct and withhold the tax under section 3402 from the wages of an em- ployee is liable for the payment of such tax whether or not it is collected from the employee by the employer.

. In general, if an individual is subject to the control or direction of another merely as to the result to be accomplished by the work and not as to the means and methods for accomplishing the result, he is an independent contractor. * * * See also sec. 31.3401(c)-1(b), Employment Tax Regs. (using virtually identical language). - 14 - In evaluating whether an employment relationship exists between a business and one of its workers, the courts consider the following factors to decide whether a w

Liability for tax The employer shall be liable for the payment of the tax required to be deducted and withheld under this chapter, and shall not be liable to any per- son for the amount of any such payment Treasury Regulation § 31 .3403 -1 Liability for tax Every employer required to deduct and withhold the tax under section 3402 from the wages of an em- ployee is liable for the payment of such tax whether or not it is collected from the employee by the employer.

employee relationship, has the status of an employee”. Sec. 3121(d)(2); secs. 31.3121(d)-1(c), 31.3306(i)-1, Employment Tax Regs. Whether an individual is a common law employee is a question of fact, Ellison v. Commissioner, 55 T.C. 142, 152 (1970); sec. 31.3121(d)-1(c)(3), Employment Tax Regs., to be determined applying the following factors: (1) The degree of control exercised by the principal; (2) which party invests in work facilities used by the individual; (3) the opportunity of the indivi

d amount of Mr. Jackson’s 2003 tax be less than $1,000, there would be no sec. 6654 addition to tax. See sec. 6654(e)(1). (The evidence indicates that Mr. Jackson had no amount withheld as tax in 2003; accordingly, there is no credit allowable under sec. 31 that might otherwise affect the operation of the exception in sec. 6654(e)(1).) - 9 - frivolous or groundless. Respondent has not asked that we impose a section 6673 penalty. We strongly warn petitioners that they may be subject to section 66

31.3121(d)-1(c)(2), Employment Tax Regs. We are not so sure that the Commissioner is looking in the right place to find the meaning of “employee”. Section 912(2) actually uses the term “civilian officers or employees of the Government of the United States.” These terms aren’t defined by tax law, but their use is quite common in federal personn

In relevant part, section 31.3401(c)-1(b), Employment Tax Regs., provides: (b) Generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which t

ld . We reject any such position . Any tax withheld from an individual's wages is deemed paid by the individual on the 15th day of the fourth month following the close of the taxable year with respect to which such tax is allowable as a credit under section 31 . See sec. 6513(b)(1) . - 23 - On the instant record, we find that petitioner has failed to show that he is not liable for the increase in the 1999 addition to tax under section 6651(a)(2) that respondent assessed on May 5, 2003, and that

] Thus, section 1 .6664-2(d), Income Tax Regs ., provides that amounts "collected without assessment" can include estimated tax payments, but only to the extent those payments, along with withholding or other credits, exceed the tax shown on the return, and only so long as the excess has not been refunded or allowed as a credit to the taxpayer .

31.3121(d)-1(c)(2), Employment Tax Regs. We are not so sure that the.Commissioner is looking in the right place to find the meaning of "employee". Section 912(2) actually uses the term "civilian officers or employees of the Government of the United States." These terms aren't defined by tax law, but their use is quite common in federal personn

31.03 (Vernon Supp. 2005), defines theft as follows: Section 31.03. Theft. (a) A person commits an offense if he unlawfully appropriates property with intent to deprive the owner of property. (b) Appropriation of property is unlawful if: (1) it is without the owner’s effective consent; * * *. Petitioners bear the burden of proving that a theft

to withholding credits of $531. We treat this stipulation as a concession by respondent that the deficiency should exclude any adjustment related to this $531 item. We further note that by definition a deficiency is determined without regard to the sec. 31 credit for tax withheld on wages. See sec. 6211(b)(1). - 11 - petitioner’s overpayment for 2001.10 The disallowance of the credit that petitioner claimed with respect to this item does not affect the amount of petitioner’s deficiency for 2002

Section 31.3121(d)-1(c)(2), Employment Tax Regs., defines the common law employer-employee relationship as follows: Generally such relationship .exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to

Section 31.3121(d)-1(c) (2), Employment Tax Regs., defines the common law employer-employee relationship as follows: - 21 - (2) Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but

The issues for decision are: (1) Whether, for the year at issue, Michael Allen Byer (petitioner) was a statutory employee as a full-time life insurance salesman under section 3121(d)(3)(B) and section 31.3121(d)-1(d)(3)(ii), Employment Tax Regs.; (2) whether petitioners are entitled to deductions for disallowed trade or business expenses incurred in connection with petitioner’s insurance activity; and (3) whether petitioners are liable for the section 6662(a) accuracy-related penalty for the yea

* * * For purposes of [defining an underpayment for purposes of section 6662], the amount “collected without assessment” is the amount by which the total of the credits allowable under section 31 (relating to tax withheld on wages) * * * estimated tax payments, and other payments in satisfaction of tax liability made before the return is filed, exceed the tax shown on the return (provided such excess has not been refunded or allowed as a credit to the taxpayer).

31.3401(c)-1(a), Employment Tax Regs. - 15 - B. Employee or Independent Contractor Petitioner’s entitlement to the deduction at issue hinges upon the proper classification of her work relationship with the State Department. Petitioner asserts she performed services under the personal service contracts as an independent contractor.2 Respondent

31.3402(q)-1(d), Example (10), Employment Tax Regs. - 13 - Section 2039(b) limits the inclusion in the gross estate of the value of certain annuities to "only such part of the value of the annuity * * * as is proportionate to that part of the purchase price therefor contributed by the decedent." Accordingly, the estate argued, since the deced

31.3121(d)-1(c)(2), Employment Tax Regs. Before considering the factors under the common-law employ- ment test, we shall address the testimony of Gary Ankerfelt (Mr. Ankerfelt) on which petitioner relies to support its position that TLC was not the employer of each driver-employee. From TLC's inception until 2000, Mr. Ankerfelt was TLC's presi

ship the parties believe they are creating, and (8) the provision of employee benefits. NLRB v. United Ins. Co., 390 U.S. 254, 258 (1968); Garrett v. Phillips Mills, Inc., 721 F.2d 979, 981 (4th Cir. 1983); Simpson v. Commissioner, supra at 984-985; sec. 31.3121(d)-1(c)(2), Employment Tax Regs. (setting forth criteria for identifying common law employees). No one factor is determinative. Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 752 (1989). Instead, all the incidents of the relation

oting Adams v. Jersey Cent. Power & Light Co., 120 A.2d 737, 740 (N.J. 1956)).] - 13 - from the service of the employer, constitute wages regardless of whether the employer is legally bound by contract, statute, or otherwise to make such payments.” Sec. 31.3401(a)-1(b)(4), Employment Tax Regs.; see Driscoll v. Exxon Corp., 366 F. Supp. 992 (S.D.N.Y. 1973). But see United States v. Jefferson-Pilot Life Ins. Co., 49 F.3d 1020 (4th Cir. 1995) (rejecting an argument that Congress intended the term “

Section 31.3121(d)-1(c)(2), Employment Tax Regs., defines the common law employer-employee relationship as follows: (2) Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as

As relevant here, section 6401(b) provides that if the amount “allowable” as refundable credits, such as the wage withholding credit under section 31 and the EIC under section 32, exceeds the “tax imposed”, the excess “shall be considered an overpayment.” It is undisputed that for the year at issue, petitioners have an allowable section 31 wage withholding credit of $225 3 Pursuant to sec.

31.03 (Vernon 2002); Tex. Fam. Code Ann. secs. 3.001-3.003 (Vernon Supp. 2002). Therefore, petitioner is not entitled to the theft loss deduction here in dispute. Respondent’s determination disallowing the theft loss deduction claimed on petitioner’s 1998 Federal income tax return is sustained. 1 With respect to the items allegedly stolen, pet

reasonable cause exists. 10 We note as alternative reasoning leading to this holding that Ms. Odell was petitioner’s statutory employee under sec. 3121(d)(1) (i.e., a corporate officer who performed more than minor services for the corporation, see sec. 31.3121(d)-1(b), Employment Tax Regs.) and that we recently indicated in Joseph M. Grey Pub. Accountant, P.C. v. Commissioner, 119 T.C. 121 (2002), that relief under the Revenue Act of 1978, Pub L. 95-600, 92 Stat. 2763, 2885, is limited to work

ny supporting facts in the record, that he might qualify for the exceptions under sec. 6554(e)(1), involving situations where the tax amount is small (generally $500 ($1,000 for tax years beginning after Dec. 31, 1997), after taking into account the sec. 31 credit for taxes withheld on wages), and sec. 6654(e)(2), involving situations where there is no tax liability for the preceding year. We disagree. We have held that petitioner is liable for deficiencies for each year at issue; these deficien

or whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and - 10 - means by which that result is accomplished.” Sec. 31.3121(d)- 1(c)(2), Employment Tax Regs.; see also Gamal-Eldin v. Commissioner, T.C. Memo. 1988-150, affd. without published opinion 876 F.2d 896 (9th Cir. 1989). With that guidance, we consider whether petitioner was a common law employee or in

This Court has held that the credit for withheld taxes allowable under section 31 does not enter into the computation of deficiencies determined under section 6211(a) and (b)(1).

Section 31.3121(d)-1(c)(2), Employment Tax Regs., defines the common law employer-employee relationship as follows: (2) Generally such relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as

and pursuant to our 1040X * * * [return] we would like a refund of all taxes paid with interest. The amended return for 1999 adds: Line #10: Apart from #1 above, we also had no statutory liability with respect to income taxes, and pursuant to Code sec. 31(a.)(1.), we have a constitutional right to have the wage tax imposed in sec. 3402(a.)(1) refunded since it represents an unapportioned, direct tax on wages, and thus unconstitutional if we could not have them refunded because of the misleading

31.3121(d)- 1(b), Employment Tax Regs.] Consequently, if an officer performs substantial services for a corporation, and receives remuneration for those services, that officer is an employee. See Veterinary Surgical Consultants, P.C. v. Commissioner, 117 T.C. 141 (2001), affd. sub nom. Yeagle Drywall Co. v. Commissioner, 54 Fed. Appx. 100 (3d

n, if any, of employee benefits. NLRB v. United Ins. Co. of Am., 390 U.S. 254, 258 (1968); United States v. Silk, 331 U.S. 704, 716 (1947); Weber v. Commissioner, supra at 387; Profl. & Executive Leasing, Inc. v. Commissioner, supra at 232; see also sec. 31.3121(d)-(1)(c)(2), Employment Tax Regs. (setting forth criteria for identifying employees under the common law rules). No single factor is dispositive; the Court must assess and weigh all incidents of the relationship. Nationwide Mut. Ins. Co

31.3401(c)-1(b), (d), Employment Tax Regs. The Court may consider various factors in determining the relationship between the parties. See Clackamas Gastroenterology Associates, P.C. v. Wells, 536 U.S. __, 123 S. Ct. 1673 (April 22, 2003); Weber v. Commissioner, supra at 387. No one factor, however, is controlling. Weber v. Commissioner, supra

with the nature of the services provided by the worker. Id. at 388. “To retain the requisite control over the details of an individual’s work, the principal need not stand over the individual; it is sufficient if he has the right to do so. * * * see sec. 31.3401(c)-1(b), Employment Tax Regs.” Ewens & Miller, Inc. v. Commissioner, supra at 270. Respondent contends that under the terms of the union agreement between IBC and Local 952, IBC controls petitioner, by controlling his sales territory, ho

31.3121(d)-1(c)(2), Employment Tax Regs. Although the determination of employee status is to be made by common law concepts, a realistic interpretation of the term “employee” should be adopted, and doubtful questions should be resolved in favor of employment. Ewens & Miller, Inc. v. Commissioner, 117 T.C. 263, 269 (2001) (citing Breaux & Daigl

c)(2). For purposes of section 6654, an individual’s tax consists of income tax and self-employment tax and is determined before the application of any wage withholding credit (but after the application of other allowable credits). Sec. 6654(f); see sec. 31. Except in very limited circumstances not applicable to this case, see sec. 6654(e)(3)(B), section 6654 provides no exception for reasonable cause or lack of willful neglect. There are two mechanical exceptions to the applicability of the sec

31.3121(a)-1(1), Employment Tax Regs. (1956). Under current law, amounts paid under accountable plans are excluded from gross income as working condition fringe benefits under sec. 132(a)(3) and (d). See sec. 1.62-1T(e)(5), Temporary Income Tax Regs., 53 Fed. Reg. 9874 (Mar. 28, 1988). The regulations on working condition fringe benefits under

work is part of the hiring party’s regular business. Alford v. United States, supra at 337-338; Weber v. Commissioner, 103 T.C. 378, 387 (1994), affd. 60 F.3d 1104 (4th Cir. 1995); Profl. & Exec. Leasing, Inc. v. Commissioner, supra at 232; see also sec. 31.3401(c)-1(b), Employment Tax Regs. Normally, control is the most significant factor in determining the nature of a working relationship. Weber v. Commissioner, supra at 387, 390. Although the courts normally employ these common law factors to

General guidance addressing common law precepts can be found in the explanation set forth in section 31.3121(d)-1(c), Employment Tax Regs.: Common Law Employees.--(1) Every individual is an employee if under the usual common law rules the relationship between him and the person for whom he performs services is the legal relationship of employer and employee.

Section 31.3121(d)- 1(b), Employment Tax Regs., limits that category as follows: (b) Corporate officers.--Generally, an officer of a corporation is an employee of the corporation. However, an officer of a corporation who as such does not perform any services or performs only minor services and who neither receives nor is entitled to receive, direct

provision of employee benefits. NLRB v. United Ins. Co. of Am., 390 U.S. 254, 258 (1968); United States v. Silk, 331 U.S. 704, 716 (1947); Weber v. Commissioner, supra at 387; Profl. & Executive Leasing, Inc. v. Commissioner, supra at 232; see also sec. 31.3121(d)-(1)(c)(2), Employment Tax Regs. (setting forth criteria for identifying employees under the common law rules). No single factor is dispositive; the Court must assess and weigh all incidents of the relationship. Nationwide Mut. Ins. Co

(8) the provision of employee benefits. NLRB v. United Ins. Co., 390 U.S. 254, 258 (1968); United States v. Silk, 331 U.S. 704, 716 (1947); Weber v. Commissioner, supra at 387; Profl. & Executive Leasing, Inc. v. Commissioner, supra at 232; see also sec. 31.3121(d)-(1)(c)(2), Employment Tax Regs. (setting forth criteria for identifying employees under the common law rules). Because no single factor is dispositive, the Court must assess and weigh all incidents of the relationship. Nationwide Mut.

. United Ins. Co., 390 U.S. 254, 258 (1968); United States v. Silk, 331 U.S. 704, 716 (1947); Garrett v. Phillips Mills, Inc., 721 F.2d 979, 981 (4th Cir. 1983); Simpson v. Commissioner, supra at 984-985; Leitch v. Commissioner, T.C. Memo. 1993-154; sec. 31.3121(d)-1(c)(2), Employment Tax Regs. (setting forth criteria for identifying common-law employees). No one factor is determinative. Community for Creative Non- Violence v. Reid, 490 U.S. 730, 752 (1989). Instead, all the incidents of the rel

Petitioner contends: (1) His wages are not taxable income because he did not perform services within the “United States” as defined by section 31.3121(e)-1, Employment Tax Regs.;2 and (2) the reported wages are based on an erroneously submitted Form W-2, Wage and Tax Statement, because petitioner did not voluntarily submit his Social Security number and sign a Form W-4, Employee’s Withholding Allowance Certificate, which resulted in the issuance of the Form W-2.

31.3401(c)- 1(b), Employment Tax Regs.; see also Weber v. Commissioner, supra at 388. Similarly, the employer need not set the employee’s hours or supervise every detail of the work environment to control the employee. Gen. Inv. Corp. v. United States, 823 F.2d 337, 342 (9th Cir. 1987). Moreover, the degree of control necessary to find employe

must provide such an informational return. See sec. 7.6041-1(a), - 5 - Temporary Income Tax Regs., 42 Fed. Reg. 1471 (Jan. 7, 1977). This latter return must be made on a Form W-2G. See sec. 7.6041- 1(c), Temporary Income Tax Regs., supra; see also sec. 31.3402(q)-1(f), Employment Tax Regs. (Form W-2G payer reporting requirements for purposes of withholding). In determining the amount won from such games, the amount wagered is deducted from the winnings in a keno game, but is not deducted in a b

. v. Commissioner, supra at 232. The factors are not necessarily weighed equally, but according to their significance in the particular case. See Aymes v. Bonelli, 980 F.2d 857, 861 (2d Cir. 1992); Matt v. Commissioner, T.C. Memo. 1990-209; see also sec. 31.3401(c)-1(d), Employment Tax Regs. Ordinarily, the principal’s right to control the manner in which the work is performed is the single most important factor in determining whether there is an employer-employee relationship. See Leavell v. Co

31.3121(d)- 1(b), Employment Tax Regs.] An officer who receives remuneration for substantial services rendered to the corporation is considered an employee within the meaning of section 3121(d). Van Camp & Bennion v. United States, 251 F.3d 862 (9th Cir. 2001); Spicer Accounting, Inc. v. United States, 918 F.2d 90, 93 (9th Cir. 1990). With reg

31.3121(d)-1(a)(3), Employment Tax Regs. For the purposes of employment taxes, the term “employee” includes “any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee”. Sec. 3121(d)(2); accord sec. 3306(i). Although the determination of employee status is to

Section 31.3401(c)-1(b), Employment Tax Regs., which generally sets forth rules as to an employer’s obligation to withhold Federal income taxes on the payment of wages, provides: Generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs

g when a return is deemed to have been filed. As applicable herein, in the case of FUTA taxes reportable on Form 940, a return is due on or before January 31 of the year following the calendar year for which the return is required. See sec. 6071(a); sec. 31.6071(a)-1(c), Employment Tax Regs. See also sec. 31.6011(a)-3, Employment Tax Regs., regarding the requirement for filing such a return. However, in case of an early return, the return is deemed to have been filed on the last day prescribed t

31.3121(d)-1(a)(3), Employment Tax Regs. This Court looks to seven factors to determine the existence of an employer-employee relationship versus an independent 2 Sec. 31.3401(c)-1(b), Employment Tax Regs., defines an employer-employee relationship as follows: (b) Generally the relationship of employer and employee exists when the person for w

31.6051-1(a)(1)(i), Employment Tax Regs.2 As the payor of a retirement annuity, Boeing was required to send petitioner a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Sec. 1.6041-1(a)(2), Income Tax Regs. The evidence here 2 Unless otherwise specified, all section refer

31A-8-101(5) (1999 Repl.) defines the term “Health maintenance organization” (HMO) as follows: (5) “Health maintenance organization” means any person, other than an insurer licensed under Chapter 7 or an individual who contracts to render professional or personal services that he performs himself, which: (a) furnishes at a minimum, either dire

ives remuneration in any form for those services is considered an employee, whose wages are subject to Federal employment taxes." Veterinary Surgical Consultants, P.C. v. Commissioner, 117 T.C. ___, ___ (2001) (slip op. at 7); see also sec. 3121(d); sec. 31.3121(d)-(1)(b), Employment Tax Regs. - 6 - With respect to the case at hand, Mr. Yeagle is an officer of petitioner who performed substantial services for petitioner, including soliciting business, ordering supplies, entering into oral and wr

1995 return until March 13, 2000. For 3Any tax withheld from a taxpayer’s wages is deemed paid by the taxpayer on the 15th day of the fourth month following the close of the taxable year with respect to which such tax is allowable as a credit under sec. 31. See sec. 6513(b)(1). Any amount paid as estimated income tax for any taxable year is deemed to have been paid on the last day for filing the return for such taxable year (determined without regard to any exten- sions of time for filing such

F. Supp. 2d 1131, 1135 (C.D. Cal. 1999) (“FICA - 9 - taxes to attach upon the actual (or constructive) receipt of wages”); Mazur v. Commissioner, 986 F. Supp. 752 (W.D.N.Y. 1997) (upholding regulation). Compare sec. 1.451-2, Income Tax Regs., with sec. 31.3121(a)-2(b), Employment Tax Regs. Petitioner’s treatment of the Gentrys’ compensation as not constructively received during its 1994 fiscal year for employment tax purposes is inconsistent with its claim of constructive receipt for income tax

eneral POAs attorneys-in-fact do not have the authority to make gifts of their principal’s property. Id. at *2; see also King v. Bankerd, 492 A.2d 608, 612 (Md. 1985) (and the numerous cases from Alaska to Utah cited therein); 3 Am. Jur. 2d, Agency, sec. 31 (Supp. 2000). In discussing the extensive case authority on this issue, the Connecticut Superior Court emphasized the following policy considerations that have been recognized: An attorney-in-fact owes to the principal the highest duty of loy

31A-8-101(5) (1999 Repl.) defines the term “Health maintenance organization” as follows: (5) “Health maintenance organization” means any person, other than an insurer licensed under Chapter 7 or an individual who contracts to render professional or personal services that he performs himself, which: (a) furnishes at a minimum, either directly o

31A-8-101(5) (1999 Repl.) defines the term “Health maintenance organization” (HMO) as follows: (5) “Health maintenance organization” means any person, other than an insurer licensed under Chapter 7 or an individual who contracts to render professional or personal services that he performs himself, which: (a) furnishes at a minimum, either dire

31.3402(q)-1, Employment Tax Regs. Although no issue has been presented on the point, given the nature of slot machine play, we think it unlikely that all of petitioner’s gains from slot machine play were subject to the issuance of a Form W-2G. Lastly, we note that in enacting the predecessor of section 165(d), the Congress was concerned that

31-1-11.5 to 7 (1995), pursuant to which the Divorce Court issued the provisional order. As pertinent here, Ind. Code sec. 31-1- 11.5 to 7(a) (1995), provides that in any pending divorce proceeding, either party may make a motion for, inter alia, temporary maintenance. In turn, Ind. Code sec. 31-1-11.5 to 7(d) (1995), provides that the “court

to quit, at any time indicates an employer-employee relationship. See United States v. W.M. Webb, Inc., 397 U.S. at 193 ("'The right to discharge is also an important factor indicating that the person possessing that right is an employer.'" (quoting sec. 31.3121(d)-1(c)(2), - 18 - Employment Tax Regs.)); Breaux & Daigle, Inc. v. United States, 900 F.2d at 53 (same); Air Terminal Cab, Inc. v. United States, 478 F.2d at 581. Although most of the drivers worked for only a few months, we find the fa

ce Act, 1972. The Income and Corporation Taxes Act, 1988, which was in effect during the year in issue, made only minor changes with respect to the ACT. The ACT was abolished, effective for distributions after Apr. 1, 1999, by the Finance Act, 1998, sec. 31. - 4 - as the U.K. Subs.), which are corporations organized and existing under the laws of the United Kingdom. During 1992, a corporation that resided in the United Kingdom was required to pay tax to the United Kingdom at the rate of 33 perce

In making this computation, "the amount shown as the tax by the taxpayer on his return" is reduced by the excess of: (i) The amounts shown by the taxpayer on his return as credits for tax withheld under section 31 (relating to tax withheld on wages) * * * over (ii) The amounts actually withheld, * * * with respect to a taxable year before the return is filed for such taxable year.

In making this computation, the tax shown on the return is reduced by: (i) The amounts shown by the taxpayer on his return as credits for tax withheld under section 31 (relating to tax withheld on wages) * * * over (ii) The amounts actually withheld, * * * with respect to a taxable year before the return is filed for such taxable year.

ducted and withheld at the source during any calendar year * * * shall * * * be deemed to have been paid by him on the 15th day of the fourth month following the close of his taxable year with respect to which such tax is allowable as a credit under section 31. - 5 - supra; Badger v. Commissioner, T.C. Memo. 1996-314; Stevens v. Commissioner, supra. To reflect the foregoing, Decision will be entered for petitioner as to the deficiency and addition to tax and for respondent as to the overpayment.

Section 6654(e) provides in pertinent part: (e) Exceptions.-- (1) Where tax is small amount.--No addition to tax shall be imposed under subsection (a) for any taxable year if the tax shown on the return for such taxable year (or, if no return is filed, the tax), reduced by the credit allowable under section 31, is less than $500.

In making this computation, “the amount shown as the tax by the taxpayer on his return” is reduced by the excess of: (i) The amounts shown by the taxpayer on his return as credits for tax withheld under section 31 (relating to tax withheld on wages) * * * over (ii) The amounts actually withheld, * * * with respect to a taxable year before the return is filed for such taxable year.

ce Act, 1972. The Income and Corporation Taxes Act, 1988, which was in effect during the year in issue, made only minor changes with respect to the ACT. The ACT was abolished, effective for distributions after Apr. 1, 1999, by the Finance Act, 1998, sec. 31. A subsidiary is controlled if the parent corporation owns more than 51 percent of the outstanding stock. See Income and Corporation Taxes Act, 1988, sec. 240(10). The relevant parts of Article 10 of the U.S.-U.K. Convention provide: Article

31.3121(d)-1(b), Employment Tax Regs. On this record, we conclude that Michael and Jody rendered substantial services to the corporation as employees. - 10 - We must next decide what constitutes reasonable compensation for the services performed by Michael and Jody as employees. Petitioners, relying on the agreements described supra, maintain

31.3121(d)-1(c)(2), Employment Tax Regs.] Petitioner argues that he performed services only in the capacity of an employee during the years in issue and therefore is not liable for any self-employment tax. The $7,900 determined by respondent to be self-employment income in 1987 was remuneration for petitioner's services paid by American Aerosp

31A-17-402(1) (1997) requires insurers to report a liability for unpaid losses equal to "the estimated amount necessary to pay all its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expense of adjustment or settlement of the loss or claim". The reserve for unpaid losses

31.3401(c)- 1(b), Employment Tax Regs. Although the record is scant, several of the factors tend to indicate that petitioner was an independent contractor. Astron did not control or direct petitioner in his activities. In addition, Astron did not provide petitioner with any fringe 8 benefits. It appears that Astron believed it was creating an

28 35 42 See also Rev.

employee under the general rule of section 3121(d)(1). Although the regulations under section 3121(d) provide an exception to this general rule, for corporate officers who as such do not perform more than minor services or receive any compensation, sec. 31.3121(d)-1(b), Employment Tax Regs., Dr. Pariani does not qualify for this exception because he performed substantial services for and received compensation from the Association. With respect to the medical services Dr. Pariani provided to the

Section 31.3401(c)-1(b), Employment Tax Regs., defines the employer/employee relationship as follows: (b) Generally the relationship of employer and employee exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work bu

ndar year under chapter 24 shall, in respect of the recipient of the income, be deemed to have been paid by him on the 15th day of the fourth month following the close of his taxable year with respect to which such tax is allowable as a credit under section 31. [Sec. 6513(a) and (b)(1).] - 8 - This case is governed by Commissioner v. Lundy, 516 U.S. ___, 116 S. Ct. 647 (1996). In Lundy, income taxes of the taxpayers (husband and wife) were withheld from their wages during 1987. On September 26,

invoked this Court's jurisdiction by filing a petition for redetermination. Shortly before trial, the Commissioner filed a motion for leave to amend answer to include an allegation that the taxpayer had claimed an excessive withholding credit under section 31. - 14 - Although recognizing that the alleged excessive credit did not fall within the definition of a deficiency under section 6211(a), the Commissioner argued that the Court had jurisdiction over the issue on the ground that it constitut

loyee or an independent contractor is normally considered a factual question, the resolution of which is dependent upon the application of certain common-law principles to the circumstances of the particular situation. Sec. 1402(d); sec. 3121(d)(2); sec. 31.3401(c)-1(d), Employment Tax Regs.; Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992); Professional Executive Leasing, Inc. v. Commissioner, 89 T.C. 225, 232 (1987), affd. 862 F.2d 751 (9th Cir. 1988). Petitioners first argue that as a

ll v. Commissioner, 104 T.C. 140, 151-152 (1995); Haag v. Commissioner, 88 T.C. 604, 611 (1987), affd. without published opinion 855 F.2d 855 (8th Cir. 1988); Bagley v. Commissioner, supra at 675-676; Johnson v. Commissioner, supra at 893; see also sec. 31.3121(d)-1(c)(2), Employment Tax Regs. When either of these prongs is not met, the individual (rather than the PSC) is taxed on the income. We apply this test to the facts at hand. With respect to the first prong, we look to the record for indi

ducted and withheld at the source during any calendar year * * * shall * * * be deemed to have been paid by him on the 15th day of the fourth month following the close of his taxable year with respect to which such tax is allowable as a credit under section 31. -12- 1989 or 1990 overpayments. We therefore hold that the statutorily imposed time limitations of sections 6511 and 6512 bar us from determining that petitioner is entitled to refunds with respect to his 1989 and 1990 income taxes. See C

United Ins. Co., 390 U.S. 254, 258 (1968); United States v. Silk, 331 U.S. 704, 716 (1947); Professional & Executive Leasing, Inc. v. Commissioner, 862 F.2d 751 (9th Cir. 1988), affg. 89 T.C. 225 (1987); Weber v. Commissioner, supra at 387; see also sec. 31.3121(d)-(1)(c)(2), Employment Tax Regs. (setting forth criteria for identifying employees under the common law rules). No single factor is dispositive; the Court must assess and weigh all incidents of the relationship. Nationwide Mut. Ins. Co

Under section 31.3401(c)-1(b), Employment Tax Regs., an employer-employee relationship-- Generally * * * exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is

invoked this Court’s jurisdiction by filing a petition for redetermination. Shortly before trial, the Commissioner filed a motion for leave to amend answer to include an allegation that the taxpayer had claimed an excessive withholding credit under section 31. Although recognizing that the alleged excessive credit did not fall within the definition of a deficiency under section 6211(a), the Commissioner argued that the Court had jurisdiction over the issue on the ground that it constituted an “

6654 1988 $13,470.04 $1,603.01 $359.92 1989 11,297.00 945.75 199.38 1990 22,364.83 2,354.46 525.37 1991 22,352.19 2,017.05 372.79 1992 18,029.00 213.25 --- 1 The deficiencies were determined without regard to either withholding tax credits under section 31 or credit for certain payments to which petitioner is entitled.

he regulation specifically. The regulation at issue is legislative in nature,' and the rules of interpretation applicable to statutes should be used in determining the meaning of legislative regulations. 1A Singer, Sutherland Statutory Construction, sec. 31.06 at 532 (4th ed. 1985); see Trustees of Indiana University v. United States, 223 Ct. C1. 88, 618 F.2d 736, 739 (1980); Rucker v. Wabash Railroad Com, 418 F.2d 146, 149 (7th Cir. 1969). The cases discuss two principles which, although often

— For purposes of this section— (1) The tax imposed by subtitle A and the tax shown on the return shall both be determined without regard to the payments on account of estimated tax, without regard to the credit under section 31, without regard to the credit under section 33, and without regard to any credits resulting from the collection of amounts assessed under section 6851 (relating to termination assessments).