Tax Court in Brief | Pediatric Impressions Home Health, Inv. v. Comm’r | Common Law Employees, Section 530 Relief, and Penalties

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The Tax Court in Brief – April 11th- April 15th, 2022

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Tax Litigation:  The Week of April 11th, 2022, through April 15th, 2022

Pediatric Impressions Home Health, Inc. v. Comm’r, T.C. Memo. 2022-35 | April 12, 2022 | Greaves, J. | Dkt. No. 5769-20

Short Summary:  Pediatric Impressions Home Health, Inc. (“Pediatric Home Health”) provides at-home nursing services to children with special needs.  When a nurse applied to work with Pediatric Home Health, the company required the nurse to complete a written job application, pass a background check, and complete a nursing skills assessment administered by the company.  After the nurses were hired, Pediatric Home Health informed them that they were “employed” and on a “full-time” basis with the company.  Pediatric Home Health had the sole authority to fire a nurse at will; however, a nurse could not end the working relationship without a minimum of two-weeks’ notice.  After services were performed, Pediatric Home Health received payment for the services.  Accordingly, the nurses had no contact with the patients’ insurance companies, the state, or Medicaid.  Pediatric Home Health also set the schedule for each nurse.  Finally, Pediatric Home Health required the nurses to attend in-service training sessions at the company’s office on issues relating to patient care, medical topics, emergency procedures, and other topics.  If a nurse failed to attend a particular training, the nurse was required to make it up at a later date or risk the withholding of pay and additional work or even termination.

Key Issue

Primary Holding

Key Points of Law

InsightCompanies that hire workers and that desire to treat the workers as independent contractors need to be extremely careful in how they treat the workers.  As shown in the above case, there are a host of various factors that come into play in determining whether any given worker is an employee or, alternatively, an independent contractor.

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