Tax Court - Jurisdiction to determine whether IRS’s worker classification determination was correct 

April 3:  The U.S. Tax Court today—in a “reviewed opinion”—held that a letter sent by the IRS to the taxpayer, concerning the proper classification of workers for employment tax purposes was a “determination” sufficient to invoke the court’s jurisdiction under section 7436. SECC Corp. v. Commissioner, 142 T.C. 12 (April 3, 2014)

The Tax Court majority found that the IRS letter sent to the taxpayer, stating that the employment tax liabilities as determined by IRS Appeals will be assessed, related to matters specified in section 7436(a) over which the court has jurisdiction.

In dissenting, the minority looked to the statute, and found that the court is to treat a worker classification determination as if it were a deficiency determination in an income tax case, but that instead of following the statute’s mandate, the majority opinion applied “a new approach to the jurisdictional question.”

Read the Tax Court opinion [PDF 144 KB]

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