In Uncategorized on 04/19/2022 at 16:20

Today Dock D. Treece gives us a doubleheader, Treece Financial Services Group, 158 T. C. 6, filed 4/19/22, and Treece Investment Advisory Corp., T.C. Memo. 2022-38, same date.

Spoiler alert: Dock is principal of both, and stips he’s an employee and ineligble for SSA §530 treatment. He’s also recipient (through these entities) of Letter 3523, Notice of Employment Tax Determination Under IRC 7436, for an aggregate FICA/FUTA/ITW hit north of $66K, plus add-ons and chops (but IRS concedes those).

Dock wants the benefit of the Voluntary Classification Settlement Program (VCSP), more particularly bounded and described in I.R.S. Announcement 2012-45, 2012-51 I.R.B. 724. This is a play nice, come clean, and we’ll give ya a discount deal.

Two issues in both cases: Has Tax Court jurisdiction to decide whether Dock’s outfits made the VCSP cut? And Dock wants summary J that it has made the cut.

ChJiW (Ch J in waiting) Kathleen (“TBS = The Big Shillelagh”) Kerrigan: “Generally, we have jurisdiction under section 7436(a) to determine: (1) whether an individual providing services to a person is that person’s employee for purposes of subtitle C;  (2) whether the person, if an employer, is entitled to relief under section 530 of the Revenue Act of 1978; and (3) the proper amounts of employment taxes which relate to the Commissioner’s determination concerning worker classification.” 158 T. C. 6, at p. 4.

The 2000 amendment to Section 7436 says Tax Court can do more than merely decide if an individual is an EE or IC. There’s also a strong presumption in favor of jurisdiction.

“Because the denial of a taxpayer’s eligibility for VCSP directly affects the amounts of tax, the procedures that Congress has established for judicial review of the Commissioner’s determinations logically contemplate review of such a denial as one element of the determination.” 158 T. C. 6, at p. 5.

So yes, Tax Court can decide if Dock’s outfits made the VCSP cut.

But Dock isn’t home-and-dry yet.

The VCSP says if you’re under employment audit, you can’t opt into VCSP. It’s not a free ride for those already collared. And IRS says the Letters 3523 show Dock had already been audited.

Not quite. “We conclude that whether there was an employment tax audit is a dispute of material fact, and therefore we will deny petitioner’s Motion for Summary Judgment.” 158 T. C. 6, at p. 6.

Well, we know the date of the Letter 3523 (10/10/19); we know the date of filing of the petition (11/25/19). We don’t know the date when Dock filed the Form 8952, Application for Voluntary Classification Settlement Program (VCSP). And we don’t know the date of the commencement of whatever led to the Letter 3523, be that audit or something else (whistleblower?). And is “commencement” measured like Boss Hossery, from the first instant?

Should be an interesting trial.


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