                  T.C. Summary Opinion 2007-195



                      UNITED STATES TAX COURT



                LAVERNE S. VANZANT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 295-06S.              Filed November 19, 2007.



     LaVerne S. VanZant, pro se.

     Brenda M. Fitzgerald, for respondent.


     FOLEY, Judge:   This case was heard pursuant to the

provisions of section 74631 of the Internal Revenue Code in

effect when the petition was filed.   Pursuant to section 7463(b),

the decision is not reviewable by any other court, and this



     1
        Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
                                - 2 -

opinion shall not be treated as precedent for any other case.

The issues for decision are whether petitioner qualifies as a

statutory employee pursuant to section 3121(d)(3)(C) and is

liable for the section 6651(a)(1) addition to tax.

                              Background

     In 2002, petitioner worked for Action Learning Systems, Inc.

(ALS) as an educational consultant for the Los Angeles Unified

School District.   Petitioner’s duties required her to visit

schools, collect data, and input the collected data into a

software template provided by ALS.      ALS determined which schools

petitioner would service and supplied the material and format for

submitting the data.   Petitioner was required to attend training

at ALS’s facilities, where she was given a training manual, a CD

with the template on it, and instructions on how to collect and

input data.   Petitioner returned, by e-mail, the templates to ALS

after the data was entered.

     For 2002, ALS issued petitioner a Form 1099-MISC,

Miscellaneous Income, with compensation of $66,150.      ALS did not

issue petitioner a W-2, Wage and Tax Statement, or withhold any

taxes from petitioner’s compensation.      On March 5, 2004,

petitioner untimely filed her 2002 return, on which she reported

Schedule C, Profit or Loss From Business, income of $66,150, but

failed to compute self-employment tax.      Petitioner did not
                                 - 3 -

request an extension to file her return.

     On October 6, 2005, respondent issued a notice of deficiency

and determined a self-employment tax deficiency of $4,866 and a

section 6651(a)(1) addition to tax of $1,435.     Petitioner paid

the tax deficiency and the addition to tax.     On January 4, 2006,

while residing in Los Angeles, California, petitioner filed her

petition with the Court.     At the time the case was tried,

petitioner resided in Georgia.

                              Discussion

     We must determine whether petitioner is a statutory employee

pursuant to section 3121(d)(3)(C), and therefore, exempt from

self-employment tax.2   Pursuant to section 3121(d)(3)(C), a

statutory employee includes any individual, other than an officer

of a corporation or a common law employee, who performs services

for pay for any person “as a home worker performing work,

according to specifications furnished by the person for whom the

services are performed, on materials or goods furnished by such

person which are required to be returned to such person or a

person designated by him”.    An individual is considered to be a

“home worker” for purposes of section 3121(d)(3)(C) if he or she

performs services off the premises of the person for whom the


     2
       If petitioner qualifies as an employee pursuant to sec.
3121(d)(3)(C), sec. 1402(c)(2) exempts her from having to pay a
self-employment tax.
                                 - 4 -

services are performed.   See sec. 31.3121(d)-1(d)(3)(iii),

Employment Tax Regs.   An individual will not be a statutory

employee, however, if the services are performed as a single

transaction rather than part of a continuing relationship, or if

the individual has a substantial investment in the facilities

used in connection with the performance of the services.    Sec.

3121(d)(3).

     Petitioner was not an officer of ALS, and we agree with the

parties that petitioner was not a common law employee.    Thus,

petitioner meets the first two requirements of section

3121(d)(3)(C).   Respondent contends that petitioner is not a

“home worker” within the meaning of the section and, thus, does

not qualify as a section 3121(d)(3)(C) statutory employee.

     Petitioner visited various schools in her assigned district

to collect the data needed to complete her reports.    Moreover, at

her home petitioner entered the data into templates.    Thus,

petitioner performed services off the premises of the person for

whom the services were performed.    In addition, petitioner was

given specific instructions on which schools to visit, the type

of data to be collected from those schools, and the format for

presenting the collected data.    Thus, petitioner performed

services according to specifications furnished by ALS.

Respondent contends that petitioner does not, however, meet the
                                - 5 -

requirements of section 3121(d)(3)(C) because she did not receive

materials or goods from ALS.

     Neither the code nor regulations provide guidance on the

meaning of “materials” or “goods”.      Yet, materials are typically

the “tools or apparatus for the performance of a given task”.

See The American Heritage Dictionary of the English Language 1079

(4th ed. 2006).   Petitioner was required to use the ALS template

to perform her duties.   The ALS template is, therefore, a

material.   Because the template falls within the definition of

materials, we need not consider whether it falls within the

definition of goods.   As noted before, petitioner was required to

return the template to ALS.    Thus, petitioner performed services

on materials or goods furnished by such person, which are

required to be returned to such person.     Further, petitioner’s

services were not performed as a single transaction, and

petitioner did not have a substantial investment in the

facilities (i.e., the schools) used in connection with the

performance of the services.   Accordingly, petitioner was a “home

worker” within in the meaning of section 3121(d)(3)(C), and

therefore, a statutory employee exempt from self-employment taxes

pursuant to section 1402(c)(2).

     We must also determine whether petitioner is liable for the

section 6651(a)(1) addition to tax.     Section 6651(a)(1) provides
                                 - 6 -

that a taxpayer shall be subject to an addition to tax for

failure to file a timely return, unless it is shown that such

failure was due to reasonable cause and not willful neglect.

Respondent bears, and has met, the burden of production relating

to the section 6651(a)(1) addition to tax and has established

that petitioner failed to file her return on time.   Sec. 7491(c);

Higbee v. Commissioner, 116 T.C. 438, 446 (2001).    Petitioner

filed her 2002 return (i.e., which was due April 15, 2003) on

March 5, 2004, and has failed to establish, pursuant to section

6651(a)(1), that such untimely filing was due to reasonable cause

and not willful neglect.   Accordingly, we sustain respondent’s

determination.

     Contentions we have not addressed are irrelevant, moot, or

meritless.

     To reflect the foregoing,



                                           Decision will be entered

                                   under Rule 155.
