Squire, Collector of Internal Revenue v. Sumner Rhubarb Growers' Ass'n

Appellee brought suit in the District Court to recover a refund of $89.14 in employment taxes for the years 1943 through 1946 which, pursuant to 26 U.S.C.A. § 1400 et seq., had been paid by appellee upon the wages of its office personnel. The claims for refund had originally aggregated $366.-03 but the Commissioner’s ruling allowed the claims insofar as they covered the tax on the wages of employees other than office employees. The trial court, after a hearing, concluded that under the provisions of 26 U.S.C.A. §§ 101 (1) and 101(12) appellee was exempt from social security tax upon any of its employees, and entered judgment in favor of appellee for the full amount plus interest and costs.

The facts are not in dispute and the problem on appeal concerns the proper application of the law to those facts. Appellee is a. co-operative agricultural corporation organized under the laws of the State of Washington. Its members, numbering approximately 100, are rhubarb growers whose farms are located in the vicinity of Sumner, Washington. Appellee’s principal business is selling the rhubarb grown by its farmer members. Most of the rhubarb is packed by these members in boxes which are sold…