Butts v. C.I.R., s. 94-2340

Decision Date10 April 1995
Docket Number94-2776,Nos. 94-2340,s. 94-2340
Citation49 F.3d 713
Parties-1701, 95-1 USTC P 50,213, Unempl.Ins.Rep. (CCH) P 14556B Dan P. BUTTS and Cynthia D. Butts, Petitioners-Appellees, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant. A. Wayne SMITHWICK and Roseanne M. Smithwick, Petitioners-Appellees, v. COMMISSIONER OF INTERNAL REVENUE, Respondent-Appellant.
CourtU.S. Court of Appeals — Eleventh Circuit

Internal Revenue Service, Loretta C. Argrett, Paula K. Speck, Asst. Attys. Gen., Gary Allen, Chief, Appellate Section, Tax Div., Dept. of Justice, Jerry E. Holmes, David English Carmack, Chief, Branch 2, Employee Benefits and Exempt Organizations Div., Washington, DC, for appellant in No. 94-2340.

Jerry E. Holmes, Employee Benefit, Gary R. Allen, Paula K. Speck, Michael L. Pump, David English Carmack, Loretta Argrett, Tax Div., Dept. of Justice, Washington, DC, for appellant in No. 94-2776 V. Jean Owens, Harris, Barrett, Mann & Dew, Sun City Center, FL, for appellees.

Appeals from the Decision of the United States Tax Court.

Before DUBINA, Circuit Judge, RONEY and ESCHBACH *, Senior Circuit Judges.

PER CURIAM:

These two appeals by the Commissioner of Internal Revenue, consolidated for oral argument, involve the appropriate tax treatment to be given to the arrangement of the taxpayers as agents selling life, automobile, fire, and other types of insurance for Allstate Insurance Company. The Commissioner of Internal Revenue contends they should be treated as employees. The taxpayers successfully contended in the United States Tax Court that they are independent contractors. We affirm.

These cases were heard and appealed separately from the decisions of different Tax Court judges, but the controlling facts are the same. When taxpayers first started selling Allstate insurance, they were concededly employees working under an Allstate Agent Compensation Agreement. Subsequently, they entered into a "Neighborhood Office Agent Amendment to Allstate Compensation Agreement."

The case of Dan P. and Cynthia Butts was first decided by Tax Court Judge Marvin P. Peterson on October 21, 1993. The sole issue presented was whether petitioner Dan P. Butts performed services for Allstate as an employee or as an independent contractor. Based upon a hearing and some stipulated facts in a thoroughly reasoned opinion, Judge Peterson held that petitioners had met their burden of proving that Mr. Butts' professional relationship with Allstate was not as an employee, rather that he was associated with Allstate as an independent contractor. Thus, the taxpayers' business deductions were to be reported under Schedule C of the tax return and not as Schedule A unreimbursed employee business expenses. Butts v. Commissioner of Internal Revenue, T.C.Memo 1993-478, 66 T.C.M. (CCH) 1041, 1993 WL 410704 (U.S.Tax Ct.1993).

Subsequently, on December 9, 1993, Tax Court Judge Charles E. Clapp, II, decided that the A. Wayne and Roseanne M. Smithwick case, involving the identical Allstate agreements involved in the Butts case, had no relevant facts that are distinguishable from the Butts case. Accordingly, Judge Clapp decided the case for the...

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15 cases
  • Romero v. Allstate Ins. Co., CIVIL ACTION NO. 01-3894
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • 27 Febrero 2014
    ...IRS In the mid-1990s several employee agents in the NOA Program obtained a tax court ruling in the case of Butts v. Commissioner of Internal Revenue, 49 F.3d 713 (11th Cir. 1995). The court found that the agents had proven that their professional relationship with Allstate was not as employ......
  • Romero v. Allstate Ins. Co.
    • United States
    • United States District Courts. 3th Circuit. United States District Court (Eastern District of Pennsylvania)
    • 7 Abril 2014
    ...mid–1990s several employee agents in the NOA Program obtained a tax court ruling in the case of Butts v. Commissioner of Internal Revenue, 49 F.3d 713 (11th Cir.1995). The court found that the agents had proven that their professional relationship with Allstate was not as employees, but rat......
  • United States v. Stinson, Case No: 6:14–cv–1534–Orl–22TBS
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Middle District of Florida
    • 6 Marzo 2017
    ...has unreimbursed expenses arising out of the employment, those expenses are to be reported under a Schedule A. See Butts v. C.I.R., 49 F.3d 713, 714 (11th Cir. 1995). In contrast, if a sole proprietor, self-employed individual, or a general contractor has expenses or business losses, those ......
  • Stern v. U.S., 94-CV-0771 (CBA).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court (Eastern District of New York)
    • 11 Diciembre 1996
    ...States Tax Court's decision in Butts v. Commissioner of Internal Revenue, 66 T.C.M. (CCH) 1041, 1993 WL 410704 (1993), aff'd, 49 F.3d 713 (11th Cir.1995).1 In Butts, an Allstate representative received a judicial redetermination of his employment status as that of an independent contractor,......
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2 books & journal articles
  • Worker classification of health care professionals.
    • United States
    • Florida Bar Journal Vol. 71 No. 6, June 1997
    • 1 Junio 1997
    ...60 F.3d 1004 (4th Cir. 1995); Lewis v. Commissioner, 66 T.C.M. 1830 (1983). (32) Butts v. Commissioner, 66 T.C.M. 1041 (1993), aff'd, 49 F.3d 713 (11th Cir. (33) Pub. L. No. 95-600, [sections] 530. (34) Pub. L. No. 97-248, [sections] 269. (35) Pub. L. No. 104-188, [sections] 1122. (36) Rev.......
  • Current developments in employee benefits.
    • United States
    • The Tax Adviser Vol. 27 No. 11, November 1996
    • 1 Noviembre 1996
    ...(6) Rev. Rul. 90-105, 1990-2 CB 69. (7) Don E. Williams Co., 429 US 569 (1977)(39 AFTR2d 77-77-1 USTC [paragraph] 9221). (8) Dan P. Butts, 49 F3d 713 (11th Cir. 1995), afff'g TC Memo 1993-478 and A. Wayne Smithwick, TC Memo 1993-582. (9) IRS Letter Ruling 9546018 (8/18/95). (10) Francis D. ......

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