Western Management, Inc. v. Commissioner of Internal Revenue Service

I concur in the result.

MEMORANDUM **

Petitioner-Appellant, Western Management, Inc. (“Petitioner”), appeals the decision of the United States Tax Court, upholding Respondent Commissioner of Internal Revenue’s determination that Robert E. Kovacevich was an “employee” of Petitioner and, thus, that certain amounts paid to Kovacevich were “wages” subject to taxation under the Federal Insurance Contributions Act (“FICA”) and the Federal Unemployment Tax Act (“FUTA”), as well as income tax withholding under 26 U.S.C. § 3402 (a).

Based on the record before us, we conclude as follows:

1. The Tax Court did not clearly err in finding that Mr. Kovacevich was a “statutory employee” of Petitioner under 26 U.S.C. § 3121 (d)(1). The services that Mr. Kovacevich performed for Petitioner are virtually analogous to those performed by the attorney/offieer in Van Camp & Bennion v. United States, 251 F.3d 862, 866 (9th Cir.2001), in that Kovacevich “exercised sole authority to make major corporate decisions” such as paying creditors, signing checks, signing the corporation’s Federal tax returns and drawing money from corporate accounts.

2. Mr. Kovacevich is not exempt from classification as an “employee” of Petitioner…