The opinion of the court was delivered by: KALODNER
This is a suit to recover $1,573.26, plus statutory interest, paid as additional taxes and interest under the provisions of Title VIII of the Social Security Act 1935, Sec. 801 et seq., 49 Stat. 636, 42 U.S.C.A. § 1001 et seq., and of Title IX of that Act, Sec. 901 et seq., 49 Stat. 639, 42 U.S.C.A. § 1101 et seq. These provisions are incorporated into the Internal Revenue Code as Chapters 9, subc. A (Insurance Contributions) and 9, subc. C (Unemployment Compensation), 26 U.S.C.A. Int.Rev.Code, § 1400 et seq., and Sec. 1600 et seq., respectively. The action arose as a result of the determination by the Commissioner of Internal Revenue that the persons upon whom the taxes involved were paid were employees of the plaintiffs within the meaning of the above statutes.
A jury trial was waived, and the case was submitted upon the pleadings and additional testimony. Accordingly, I make the following
1. The plaintiffs, Louis A. Hirsch, Julius Weintraub, James Weintraub and Meyer Weintraub, co-partners trading as Hirsch, Weintraub & Co., were engaged in the business of manufacturing uniforms in the city of Philadelphia from 1906 to December 31, 1939, at which time said firm was dissolved.
3. Both plaintiff firms found it necessary from time to time to have their surplus work done by outside contractors. At various times, they have used from eight to ten contractors. The plaintiffs employ from 300 to 350 persons in their own plant.
4. One of the contractors to whom the plaintiffs gave their surplus work was Eugene Moccio. He was the plaintiffs' felling contractor. Felling consists principally of sewing the sleeve into the shoulder of a cost.
5. In 1942, the Collector of Internal Revenue assessed both plaintiff firms for additional unemployment taxes and additional insurance contributions taxes under Titles VIII and IX of the Social Security Act on the ground the Moccio was an employee of the plaintiffs, and that homeworkers employed by Moccio to do the felling were also employees of the plaintiffs.
6. On September 29, 1942, the plaintiff firm Weintraub Brothers & Company paid, under protest, to the Collector of Internal Revenue $333.42 representing additional insurance contributions taxes for the years 1940 and 1941 assessed under the provisions of Chapter 9A of the Internal Revenue Code (Federal Insurance Contributions Act); on the same day said company paid, also under protest, to the Collector of Internal Revenue $490.45, representing additional unemployment taxes and interest thereon for the years 1940 and 1941 assessed under Chapter 9C of the Internal Revenue Code (Federal Unemployment Tax Act).
7. On October 7, 1942, the plaintiff firm Hirsch, Weintraub & Company paid, under protest, to the Collector of Internal Revenue $282.75, representing additional insurance contributions, taxes and interest thereon for the period July 1, 1937, to December 31, 1939, assessed under Title VIII of the Social Security Act and Chapter 9A of the Internal Revenue Code; on the same day said company paid, also under protest, to the Collector of Internal Revenue $466.64, representing federal unemployment taxes and interest thereon for the years 1937, 1938 and 1939, assessed under Title IX of the Social Security Act and Chapter 9C of the Internal Revenue Code.
8. The plaintiff firms filed claims for refund with the Collector of Internal Revenue covering the sums paid as set forth in the preceding paragraphs. Said claims for refunds were properly filed within the time limit prescribed by the applicable statute.
9. The Collector of Internal Revenue has denied the plaintiffs' claims for refund, and this suit has been brought to recover said sums with interest.
10. In 1930 Moccio approached the plaintiffs and requested that he be given their surplus felling. The plaintiffs did give Moccio their surplus felling and Moccio continued to do the surplus felling ...