--- title: "No Tax Court Jurisdiction Over Employment Tax Liability" type: "post" published_at: "2018-08-08T23:52:57+00:00" modified_at: "2018-08-08T23:52:57+00:00" url: "https://bestirscpa.com/no-tax-court-jurisdiction-over-employment-tax-liability/" excerpt: "A recent Tax Court decision was reported dealing with Tax Court Jurisdiction. J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in Raleigh and Wilmington, NC & North Myrtle Beach and Myrtle Beach, SC works to stay..." markdown_url: "https://bestirscpa.com/no-tax-court-jurisdiction-over-employment-tax-liability.md" --- - Post published:August 8, 2018 A recent Tax Court decision was reported dealing with Tax Court **Jurisdiction**. J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in Raleigh and Wilmington, NC & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for clients No**jurisdiction**was determined by the Eighth Circuit and the Eight Circuit affirmed the dismissal of an S corporation’s Tax Court petition challenging an IRS determination that the compensation paid to the sole owner and officer of the S corporation was unreasonable. The Eighth Circuit found that there was no actual controversy under Code Sec. 7436 as to the determination of the S corporation shareholder’s employment status for Federal Insurance Contribution Act (FICA) tax purposes and thus Code Sec. 7436 did not come into play. Azarian v. Comm’r, 2018 PTC 229 (8th Cir. 2018). Under Code Sec. 7436(a)(1), the Tax Court has **jurisdiction** over a petition if there is an actual controversy involving a determination that an individual performing services is an employee for FICA tax purposes. Thus, the issue was whether there was an actual controversy involving a determination that Azarian was an employee for FICA tax purposes. The Eighth Circuit affirmed the Tax Court’s dismissal for lack of **jurisdiction**. The Eighth Circuit found that even if there was an actual controversy, it did not involve a determination that Azarian was an employee for FICA tax purposes as required under Code Sec. 7436(a)(1). The court determined that by reporting wages to Azarian each year, the S corporation claimed Azarian was an employee, so the IRS did not make a determination on that issue. Instead, the IRS relied on the S corporation’s classification. 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