Richard M. Abraham was the head honcho of The REDI Foundation, Inc., T. C. Memo. 2022-34, filed 4/11/22, a 501(c)(3) flogger of online real estate development courses. It’s not REDI that’s at issue, it’s the FICA and ITW for Richard’s draws from REDI (FUTA is apparently off the table for unstated reasons).

Richard incorporated REDI back in 1980 and was a corporate director and officer throughout. Richard says his corporate officership was merely incidental, that he really was an IC, and wanted a sashay through the multitudinous factors of employeeship.

Judge Nega isn’t having any. Section 3121(d)(1) defines “any officer” as an employee of the corporation. As a statutory employee, the only outs are the statutory exemptions. Commonlaw distinctions are preempted.

“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.” T. C. Memo. 2022-34, at p. 5. And an officer can perform minor services for no compensation and also be an employee, provided the lines between the two are clearly drawn and maintained.

“The record establishes that Mr. Abraham provided services for petitioner that constituted its entire source of income and received remuneration for those services; as respondent suggests, it is a ‘fair inference’ that Mr. Abraham did so as an officer and statutory employee.” T. C. Memo. 2022-34, at p. 5.

Richard’s argument that he was paid royalties for his coursework is a loser. Simply paying yourself what you call “royalties” from your controlled corporation doesn’t make it so.

Richard’s 1099-MISC to himself from REDI is self-serving, and Richard has no written contract with REDI describing his duties.

“Mr. Abraham was the sole person in charge of overseeing and executing the online course (petitioner’s only business activity); he necessarily provided a wide variety of services to petitioner, including managerial decisions about the content, marketing, and enrollment of the online course.” T. C. Memo. 2022-34, at p. 7.

His services weren’t minor. And Richard’s command-and-control argument is for commonlaw EE situations, not statutory. And the SSA Section 530 longstanding-practices argument is also for commonlaw employees, not statutory ones.

Richard’s evidence for good-faith reliance to avoid the add-ons is missing, both for failure to file 941s and failure to pay. But so is the Section 6751(b) Boss Hoss sign-off, so IRS folds the chops.