B. Application of § 530 to the instant case
In this case, however, the Court finds that the evidence of record demonstrates that plaintiff cannot meet the requirements of § 530 set forth above. More specifically, the record demonstrates that plaintiff did not treat all individuals who held similar positions as independent contractors, failing § 530's "substantial consistency requirement." Indeed, plaintiff treated his only driver, Halfhill, as an employee in 1978 and 1979, but from 1982 through 1990, plaintiff treated all the individuals who drove HT's trucks, including Halfhill, as independent contractors. The type of work performed by Halfhill in the 1970's, however, was substantially similar to the work performed by all of the drivers in the 1980's; these individuals drove HT's trucks, negotiated with carriers regarding the leasing of HT's vehicles, and were paid a percentage of what HT's trucks actually earned. Thus, because plaintiff has inconsistently labeled individuals who performed similar job functions, he is not entitled to § 530's shelter. See also Lowen Corp. v. United States, 785 F. Supp. 913, 915-16 (D. Kansas 1992); Erickson, 172 Bankr. at 913; Nash v. United States, 1995 U.S. Dist. LEXIS 16492, No. 93-5877, 1995 WL 655588, at *1 (E.D. Pa. November 7, 1995) (all holding that inconsistent treatment of workers precludes relief under § 530).
Contrary to the Court's findings, plaintiff has argued that there are material issues of fact in dispute with regard to whether plaintiff has satisfied § 530's consistency requirements. More specifically, plaintiff contends that the evidence indicates that plaintiff actually started a new business in 1982, borrowing the name of his first business. Therefore, plaintiff argues that the fact that he treated Halfhill as an employee in 1978 and 1979 is irrelevant and because he treated all of his drivers consistently for the period that his new business was in operation--1982 through 1990--he is entitled to protection under § 530.
The Court, however, finds plaintiff's arguments to be unpersuasive for the following reasons. First, the provisions of § 530 look to whether a "taxpayer" or a "taxpayer's predecessor" has treated workers consistently, not to the actions of a particular business. In this case, plaintiff cannot dispute that he was the same taxpayer from 1978 through 1990.
In fact, plaintiff used the same employer identification number on his IRS filings throughout this period. Moreover, a reasonable factfinder could not conclude, based on the record before the Court, that plaintiff ever started a "new" business. Although plaintiff indicated in his deposition that he did so, when questioned more thoroughly, plaintiff stated that he believed he started a new business simply because of the way he treated his drivers for tax purposes. (See defendant's Exhibit A-1, pp. 167-68). This testimony, coupled with the alleged "new" business' same name, function, and ownership as the alleged "old" business, demonstrate that plaintiff did not, in fact, start a different company. Finally, even if plaintiff had started another business, the evidence indicates that the first business was a predecessor of the second business, and the consistency requirements would, therefore, apply to the period that both businesses were in operation, i.e., 1978 through the present.
In sum, the Court finds that defendant is entitled to summary judgment with regard to plaintiff's claim to relief under § 530 because the plaintiff cannot satisfy § 530's substantial consistency requirement. Therefore, the Court will grant the defendant's motion for partial summary judgment.
An appropriate Order will be issued.
Alan N. Bloch
United States District Judge
AND NOW, this 7th day of March, 1996, upon consideration of Defendant's Motion for Partial Summary Judgment (document No. 12) filed in the above captioned matter on January 26, 1996, and upon further consideration of Plaintiff's Response thereto, and for the reasons set forth in this Court's Memorandum Opinion filed herewith,
IT IS HEREBY ORDERED that said Motion is GRANTED. IT IS FURTHER ORDERED that judgment be, and hereby is, entered in favor of defendant and against plaintiff with regard to plaintiff's claim to relief from tax liability under § 530 of the Revenue Act of 1978.
Alan N. Bloch
United States District Judge