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Rule 290. General

(a) Applicability: The Rules of this Title XXVIII set forth the provisions which apply to actions for redetermination of employment status under Code Section 7436. Except as otherwise provided in this Title, the other Rules of Practice and Procedure of the Court, to the extent pertinent, are applicable to such actions for redetermination.

(b) Jurisdiction: The Court shall have jurisdiction of an action for redetermination of employment status under this Title when the following conditions are satisfied:

(1) In connection with an audit of any person, there is an actual controversy involving a determination by the Commissioner as part of an examination that:

(A) One or more individuals performing services for such person are employees of such person for purposes of subtitle C of the Code, or

(B) Such person is not entitled to the treatment under subsection (a) of section 530 of the Revenue Act of 1978, Pub. L. 95-600, 92 Stat. 2763, 2885, with respect to such an individual.

(2) A petition for redetermination of employment status is filed with the Court in accordance with Rule 291, or, in a small tax case under Code Section 7436(c), with Rule 295(d)(1), by the person for whom the services are performed.

(c) Time for Filing After Notice Sent: If the Commissioner sends by certified or registered mail to the petitioner notice of the Commissioner's determination of matters set forth in Code Section 7436(a)(1) and (2), then no proceeding may be initiated with respect to such determination unless the petition is filed within the period specified in Code Section 7436(b)(2).

Section 530(a) of Pub. L. 95-600, referred to in subsec. (b)(1)(B), is set out as a note under section 3401 of this title.

Title XXVIII sets forth procedures for actions under section 7436 of this title, as added by section 1454 of the Taxpayer Relief Act of 1997, Pub. L. 105-34, 111 Stat. 788. Section 7436 of this title provides for a redetermination of the Commissioner's determination of employment status and is effective on Aug. 5, 1997, the date of enactment of the Taxpayer Relief Act of 1997. Similarly, the Rules of Title XXVIII are effective with respect to actions for redetermination of employment status commenced on or after Aug. 5, 1997.

Rule 291. Commencement of Action for Redetermination of Employment Status

(a) Commencement of Action: An action for redetermination of employment status under Code Section 7436 shall be commenced by filing a petition with the Court. See Rule 20, relating to commencement of case; Rule 22, relating to the place and manner of filing the petition; and Rule 32, relating to the form of pleadings.

(b) Content of Petition: A petition filed pursuant to this Rule shall be entitled "Petition for Redetermination of Employment Status Under Code Section 7436" and shall contain the following:

(1) In the case of a petitioner other than a corporation, the petitioner's name and legal residence; in the case of a corporate petitioner, the petitioner's name and principal place of business or principal office or agency; and, in all cases, the petitioner's mailing address and identification number (e.g., Social Security number or employer identification number). The mailing address, legal residence, and principal place of business, or principal office or agency, shall be stated as of the date that the petition is filed.

(2) If the Commissioner sent by certified or registered mail to the petitioner notice of the Commissioner's determination of matters set forth in Code Section 7436(a)(1) and (2), then--

(A) the date of the notice in respect of which the petition is filed and the City and State of the office of the Internal Revenue Service that issued the notice; and

(B) as an attachment, a copy of such notice.

(3) The calendar quarter or quarters for which the determination was made.

(4) Clear and concise assignments of each and every error which the petitioner alleges to have been committed by the Commissioner in the Commissioner's determination of matters set forth in Code Section 7436(a)(1) and (2). Any issue not raised in the assignments of error shall be deemed to be conceded. Each assignment of error shall be separately lettered.

(5) Clear and concise lettered statements of the facts on which the petitioner bases the assignments of error.

(6) A prayer setting forth the relief sought by the petitioner.

(7) The signature, mailing address, and telephone number of each petitioner or each petitioner's counsel, as well as counsel's Tax Court bar number.

A claim for reasonable litigation or administrative costs shall not be included in the petition in an action for redetermination of employment status. For the requirements as to claims for reasonable litigation or administrative costs, see Rule 231.

(c) Small Tax Case Under Code Section 7436(c): For provisions regarding the contents of a petition in a small tax case under Code Section 7436(c), see Rule 295(d)(1).

(d) Filing Fee: The fee for filing a petition for redetermination of employment status shall be $60, payable at the time of filing.

Rule 292. Designation of Place of Trial

At the time of filing a petition for redetermination of employment status, the petitioner shall file a designation of place of trial in accordance with Rule 140.

Rule 293. Other Pleadings

(a) Answer: Except in a small tax case under Code Section 7436(c), the Commissioner shall file an answer or shall move with respect to the petition within the periods specified in and in accordance with the provisions of Rule 36.

(b) Reply: Except in a small tax case under Code Section 7436(c), for provisions relating to the filing of a reply, see Rule 37.

(c) Small Tax Case Under Code Section 7436(c): For provisions relating to the filing of other pleadings in a small tax case under Code Section 7436(c), see Rule 295(d)(2).

Rule 294. Joinder of Issue in Actions for Redetermination of Employment Status

(a) Joinder of Issue: Except in a small tax case under Code Section 7436(c), an action for redetermination of employment status under Code Section 7436 shall be deemed at issue as provided by Rule 38.

(b) Small Tax Case Under Code Section 7436(c): An action for redetermination of employment status under Code Section 7436 shall be deemed at issue in a small tax case under Code Section 7436(c) upon the filing of an answer or the expiration of the period specified in Rule 36(a).

Rule 295. Small Tax Case Procedure in Actions for Redetermination of Employment Status

(a) Small Tax Case Under Code Section 7436(c) Defined: The term "small tax case under Code Section 7436(c)" for purposes of this Title means a case in which:

(1) The amount of employment taxes placed in dispute is $50,000 or less for each calendar quarter involved;

(2) The petitioner has made a request in accordance with paragraph (b) of this Rule to have the proceedings conducted under Code Section 7436(c); and

(3) The Court has not issued an order in accordance with paragraph (c) of this Rule, discontinuing the proceedings in the case under Code Section 7436(c).

(b) Election of Small Tax Case Procedure in Actions for Redetermination of Employment Status: With respect to classification of a case as a small tax case under Code Section 7436(c), the following shall apply:

(1) A petitioner who wishes to have the proceedings in the case conducted under Code Section 7436(c) may so request at the time the petition is filed. See subparagraph (d)(1) of this Rule.

(2) A petitioner may, at any time after the petition is filed and before trial, request that the proceedings be conducted under Code Section 7436(c). Such request shall contain a statement that the amount of employment taxes placed in dispute is $50,000 or less for each calendar quarter involved.

(3) If such request is made in accordance with the provisions of this paragraph, then the case will be docketed as a small tax case under Code Section 7436(c). The Court, on its own motion or on the motion of a party to the case, may, at any time before the trial commences, issue an order directing that the small tax case designation shall be removed and that the proceedings shall not be conducted as a small tax case under Code Section 7436(c). If no such order is issued, then the petitioner will be considered to have exercised the petitioner's option and the Court shall be deemed to have concurred therein, in accordance with Code Section 7436(c), at the commencement of the trial.

(c) Discontinuance of Proceedings: After the commencement of a trial of a small tax case under Code Section 7436(c), but before the decision in the case becomes final, the Court may order that the proceedings be discontinued under Code Section 7436(c), and that the case be tried under the Rules of Practice other than those applicable to small tax cases under Code Section 7436(c), but such order will be issued only if:

(1) there are reasonable grounds for believing that the amount of employment taxes placed in dispute will exceed $50,000 for each calendar quarter involved; and

(2) The Court finds that justice requires the discontinuance of the proceedings under Code Section 7436(c), taking into consideration the convenience and expenses for both parties that would result from the order.

(d) Pleadings in Small Tax Case Under Code Section 7436(c): (1) Petition: A petition in a small tax case under Code Section 7436(c) shall be commenced in accordance with and shall contain the information required by Rule 291. In addition, such petition shall contain the following:

(A) A request that the proceedings be conducted under Code Section 7436(c); and

(B) A statement that the amount of employment taxes placed in dispute is $50,000 or less for each calendar quarter involved.

(2) Other Pleadings: For provisions relating to the filing of other pleadings, see Rule 175(b) and (c).

(e) Applicable Small Tax Case Rules of Title XVII: Proceedings in a small tax case under Code Section 7436(c) shall be governed by the provisions of the following Small Tax Case Rules of Title XVII (see Rule 170) with respect to the matters to which they apply: Rule 174 (representation); Rule 176 (preliminary hearing); Rule 177 (trial); Rule 178 (transcript of proceedings); and Rule 179 (number of copies of papers).

Amendment increasing dollar amount from $10,000 to $50,000 throughout Rule is effective with respect to proceedings commenced after July 22, 1998.