Tax Court In Brief | Pediatric Impressions Home Health, Inv. v. Comm'r | Common Law Employees, Section 530 Relief, And Penalties

Published date19 April 2022
Subject MatterLitigation, Mediation & Arbitration, Tax, Trials & Appeals & Compensation, Income Tax, Tax Authorities
Law FirmFreeman Law
AuthorFreeman Law

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

Freeman Law's "The Tax Court in Brief" covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

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

  • The REDI Foundation, Inc. v. Comm'r T.C. Memo. 2022-34 |April 11, 2022?|Nega, J. | Dkt. No 23715-18
  • Mihalik v. Comm'r | April 13 2022?| Gustafson, D. | Dkt. No 7881-19

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

  • Opinion

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:

  • (1) Whether approximately 99 individuals (e., nurses) are properly classified as employees of Pediatric Home Health;
  • (2) Whether Pediatric Home Health is entitled to section 530 relief for the periods at issue with respect to the nurses;
  • (3) Whether Pediatric Home Health is liable for penalties under section 6651(a)(1), section 6656, and section 6662.

Primary Holding:

  • (1) Yes, under established Fifth Circuit precedent, the nurses are properly characterized as...

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