AAI Services, Inc. v. United States

ORDER REVERSING RULING OF THE BANKRUPTCY COURT

IT IS HEREBY ORDERED:

This appeal considers whether work performed by Special Agricultural Worker applicants (a status of alien workers created by Congress in 1986), is exempt from employment taxation. AAI Services, Inc. appeals from the Bankruptcy Court’s order granting summary judgement in favor of the United States.

REVERSED.

JURISDICTION

On June 17,1997, the United States Bankruptcy Court for the Central District of California issued an order granting summary judgement in favor of the United States of America. On June 24, 1997, the Appellant filed a Notice of Appeal and an Objection to Hearing and Disposition by the Bankruptcy Appellate Panel. Therefore, this Court has jurisdiction under 28 U.S.C. § 158 (a).

BACKGROUND

This case arises from actions on the part of the Internal Revenue Service to impose federal employment taxes on labor performed by employees of AAI Services (AAI), the plaintiff and appellant herein.

Plaintiff AAI, a California corporation, employs foreign agricultural workers to harvest seasonal crops. Between 1988 and 1991, AAI paid over $30 million in wages to agricultural workers. Believing that the…