Levine v. Commissioner
| Decision Date | 14 April 2005 |
| Docket Number | Dkt. No. 9715-03. |
| Parties | Lisa Beth Levine v. Commissioner. |
| Court | U.S. Tax Court |
Lisa Beth Levine, pro se;
W. Randolph Shump and Pamela J. Arthur Gerlach, for respondent.
Respondent determined a $2,571 deficiency in petitioner's 1999 Federal income tax. The ultimate issue to be decided is whether petitioner is entitled to a deduction for her contribution to her simplified employee pension for 1999. Resolution of the ultimate issue depends upon whether petitioner's employment relationship with the U.S. Department of State (the State Department) from January 1 until November 19, 1999, under two personal service contracts covering that period, was that of a common law employee of the State Department, as respondent asserts, or an independent contractor, as petitioner asserts. We hold that petitioner's relationship with the State Department was that of an independent contractor.1
This case was submitted to the Court fully stipulated pursuant to Rule 122. Petitioner resided in Berwyn Heights, Maryland, when she filed her petition in this case.
On June 30, 1998, petitioner entered into a personal service contract with the State Department to provide full-time services to the Office of Foreign Buildings Operations (FBO), Office of Operations and Post Support, Safety Division, as an industrial hygienist from July 5, 1998, to July 3, 1999. On July 2, 1999, petitioner entered into a second personal service contract with the State Department to provide full-time services as an industrial hygienist from July 4, 1999, to July 1, 2000.
The personal service contracts stated that (1) the contracts were authorized pursuant to 22 U.S.C. secs. 291-301 and (2) personnel hired under personal service contracts were not appointed, Federal employees (direct hire employees) as defined in 5 U.S.C. sec. 2105. Standard Form 279, Federal Procurement Data System (FPDS) Individual Action Report, states that the contractor is a small, woman-owned business.
The State Department and/or petitioner had the right to terminate the personal service contracts without cause at any time with 30 days' notice. The State Department could also terminate the personal service contracts for cause by written notice from the contracting officer to petitioner.
As an industrial hygienist, petitioner was responsible for (1) managing, coordinating, and implementing the State Department's worldwide industrial hygienist field technical services program; (2) directing or conducting evaluations and studies of work environments for health hazards; and (3) providing specific guidance and assistance to ensure protection of employees. Petitioner performed her services according to the statement of work attached to the personal service contracts. The statement of work described petitioner's major duties to be as follows:
1. Under the general direction of the senior industrial hygienist, implements the Occupational Health Program to provide a responsive health program. Conducts industrial hygiene and environmental health inspections worldwide. Writes comprehensive reports for the Safety Director, or the Senior Industrial Hygienist, with little administrative direction.
2. Inspects and monitors facilities, processes, or activities which may adversely impact employee health or the environment. Recommends or implements measures to eliminate or alleviate hazards. Writes comprehensive and insightful reports based on a professional evaluation of data collected during the survey.
3. Evaluates proposals involving toxic chemicals or physical agents which may adversely effect employee health, public health, or the environment. Recommends or implements measures to prevent anticipated hazards during construction/renovation projects.
4. Specifies equipment to protect employees, the public, or the environment from toxic chemicals or physical agents. Specifies analytical information to monitor toxic chemicals or physical agents such as radiation, noise and heat stress.
5. Trains employees in the use, handling and disposal of toxic chemicals and physical agents.
6. Investigates employee suggestions regarding industrial hygiene or environmental health hazzards. Recommends methods to eliminate or alleviate indoor air quality concerns.
7. Plans and develops a system for monitoring, coordination and collating industrial hygiene data generated by the industrial hygiene contractor and/or in-house resources. Develops an industrial hygiene management information system.
The statement of work described the "Supervisory Controls" as follows:
Incumbent [petitioner] works under broad administrative guidance of the Senior Industrial Hygienist, who makes work assignments in terms of projects to be accomplished and provides statements of policy and overall scope to guide the incumbent. Completed work is considered technically authoritative and is normally accepted without significant change.
Petitioner was responsible for the quality and technical accuracy of all services and work product delivered under the personal service contracts. The Government had the right to inspect and test all services, and if any of the services performed did not conform with the contract requirement, the Government could require petitioner alternatively to (1) perform the services again in conformity with those requirements or (2) take necessary action to ensure the conformance of future performance.
The personal service contracts were executed by a contracting officer on behalf of the Government. Under the personal service contracts, the contracting officer could designate a contracting officer's representative (COR) to take action for the Contacting Officer under the contracts. The designation had to specify the scope and limitations of the authority delegated. Under the personal service contracts, petitioner was directly responsible to the COR. The COR was to provide assignments to petitioner, provide policy guidance, establish general priorities, and outline policy goals and objectives. Petitioner was responsible for planning and carrying out the projects.
The personal service contracts named Stephen Urman as the COR. Under Delegations of Authority and Responsibility of Contracting Officer's Representative, the contracting officer authorized Mr. Urman to: (1) Coordinate with petitioner on all technical matters, (2) give technical clarification as to the meaning of the specifications including inspecting, testing, and acceptance procedures, (3) inspect petitioner's progress to assure compliance with the contract terms and conditions, and (4) perform all functions necessary to accept the products or services for the Government. The delegation precluded Mr. Urman from altering or modifying the personal service contracts. Upon completion of petitioner's work, Mr. Urman was to inspect petitioner's work and inform the contracting officer, in writing, of any deviations from contract requirements. If there were no deficiencies, a statement of satisfactory (or better) performance would be appropriate. Mr. Urman was to prepare a written evaluation of petitioner's performance at the end of the contract.
Under the personal service contracts, petitioner was required to provide the services personally and was not permitted to reassign or delegate her duties to others. Petitioner did not have any employees.
Petitioner worked with Federal employees and other workers. Petitioner did not supervise direct hire Government personnel, but she could make recommendations to the COR and coordinate projects with direct hire personnel.
Petitioner's services under the personal service contracts required a valid security clearance. Petitioner was required to maintain strict secrecy concerning any information or documentation she obtained in conjunction with work performed under the contracts. The contracts required classified materials assigned to, or generated by, petitioner to be stored in appropriate containers in FBO, the State Department, or the appropriate U.S. Foreign Service Post.
The personal service contracts required the State Department to provide to petitioner, to the extent practical, office space, furniture, telephone, office equipment (including word processors, computers, typewriters, calculators, copying machines, etc.), and office supplies that would ordinarily be used by Government employees doing similar work for the State Department. Pursuant to the contracts, petitioner was to work 5 days per week, Monday through Friday, 8 hours per day from 8:30 a.m. to 5:15 p.m., with a 45-minute lunch break, when she worked at the office location.
Petitioner performed approximately 40 percent of her services outside the United States. Petitioner received reimbursements for travel expenses pursuant to the personal service contracts.
Petitioner was paid an annual salary of $67,162 ($32.18 per hour calculated on a work year of 2,087 hours) under the first service contract and $69,631 ($33.36 per hour calculated on a work year of 2,087 hours) under the second contract. Petitioner's salary was comparable to that of a Government employee classified as GS-13, step 7, including the locality pay differential for the Washington, D.C. area, during the contract periods. Petitioner received base rate increases at the same time and in the same proportion that regular State Department employees received their wage scale increases during the contract periods.
Petitioner was eligible to earn overtime for hours worked in excess of 40 hours per week and could earn compensatory time in lieu of overtime. Petitioner was required to obtain approval by the COR in advance of working overtime and/or taking compensatory time.
Petitioner...
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