Tax research memorandum


According to the stipulation of the parties’ facts and the attached exhibits, they are included herein by the reference, and the stipulated facts found. When the fact was filed, the petitioner was involved in operating a truck company. Under the leases, petitioner is required to provide the drivers to be operating its trucks and taking responsibilities on work performed by them in confirmation of their work in accordance to leases. Consequently, the petitioner was required to supervise, direct, pay, discharge, and discipline its drivers.

The petitioner also was responsible in determining the days and the hours the drivers operate in a day, also, the routes drivers take while transporting their properties.  Moreover, the orders in which the drivers pick and deliver shipments through ensuring drivers had appropriate commercial drivers licenses (Carmack, 73). Furthermore, the lease requires the petitioner to present driver’s logs to the relevant transport authorities, preservation and carrying of manifestos, way bills, lading bills, freight bills and other papers and the records that respected lading and equipment use, all should be in accordance to applicable regulations and laws. The petitioner also entered in agreement with each of the drivers during periods at issue that expressly provided that they were independent contractors and were entitled to terminate or end their relationship anytime.


According to T.C. Memo. 2007-66, the subject for judgment was: “whether certain drivers who operated petitioner’s trucks were employees of petitioner for federal employment tax purposes during the periods at issue and, if so (2) whether a petitioner is entitled to relief under section 530 of the revenue act of 1978, pub. L. 95-600, 92 stat. 2885, as amended (act section 530).”  In this context we focus on Aaron’s compliment.


According to block, peno would not be required to obey FICA and FUCA requirements if truly his drivers were independent contractors. Unemployment taxes and state workers compensation would also be perhaps evaded. Additionally, the green hired and fired supervised, paid fuel, road taxes and tolls and enforced logs, necessitated repairs. Aaron is only, a connected part of green business and the relationship is not temporary. This factor makes Aaron an employee (Cherrie, p. 97).

Arguments and Authorities

If the drivers of green company were independent contractors, green company would not be subjected to FICA and FUCA obligations.  According to green delivery services, employees are not entitled to the retired benefits for they are not fully employed. The employees sign a contract that protects them from harassment by employers. When an investor pays capital, the company gains tax only after the investor liquidates the savings. It probably avoids the state workers unemployment and compensation taxes. According to the green company, there was nothing that suggested the drivers were self and independent contractors (Carmack, 73). While the drivers were being paid commissions basing on collections from motor carrier, contrary to the salaries or the wages paid in hours, and they also rested when they like, take any route depending on their own choice, green company exercised a huge control over them. Most of the tools and equipments which included trucks were properties of green company. Additionally, the company hired and fired, enforced logs and supervised, paid tolls, requires repair, road taxes and fuel. The drivers at green company were integral part in the business, and their relation to the company was not transitory. The factors mentioned above makes the drivers (Eugene, p.111) employees regardless of what they are termed by the employer.

Work cited

Jockeying, Carmack .a carrier can’t dodge federal cargo liability law by moving first with a freight charge collection action. New York: University Press. 2007. Pg. 73.
Robinson, Worldwide. (R.E.I. Transport, Inc. c. C.H. Inc., 2007 WL 854005 (S.D. Ill 2007)

Arctic Express, Inc. v. Del Monte Fresh Produce NA, Inc., 2007 WL 968161 (S.D. Ohio 2007)

Ernie Larkins’ MTax writing website at

Eugene, Willis. South-Western federal taxation: individual income taxes. Cengage Learning, 2009         479 pages

Cherrie, Hennig. Contemporary Tax Practice: Research, Planning and Strategies. CCH, 2008 ISBN0808018655, 696 pages

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