Melvin McGuire and Alvina McGuire v. United States of America, Rahier Trucking, Inc. v. United States

Taxpayers’ unsuccessful suit for refund of federal withholding, unemployment, and social security taxes paid for the years 1959-1962 is the basis for this appeal. The District Court sitting without a jury dismissed the suit and denied motions for judgment notwithstanding the verdict and for a new trial.

The single question before us is whether the District Court correctly sustained the determination of the Commissioner of Internal Revenue that certain workers were taxpayers’ employees and hence taxpayers were liable for taxes under the Federal Insurance Contributions Act, Federal Unemployment Tax Act, and withholding tax provisions pursuant to sections 3101-3125, 3301-3308 and 3401-3404 of the Internal Revenue Code of 1954.

Taxpayers were owners and operators of non-scheduled motor freight carriers engaged in hauling produce and fruit between the Yakima Valley in Washington and various points in California, chiefly the Los Angeles area. Taxpayers’ operations consisted of picking up goods and transporting them to appointed destinations. Under the usual contract with its customers taxpayers were required to deliver their cargo to the loading dock of the receiver and unload it. The…