NOT RECOMMENDED F OR FUL L -TEXT PUB L I CATI ON File Na me: 12a1079n.06 No. 11-2232 UNI TED STATES COURT OF A PPEAL S FOR THE SI XTH CI RCUI T

MARTI N COOPER

, ) ) Petitioner-Appellant , ) ON APPEALFROM THE U NI TED ) STATES TAX COURT v. ) ) COMMI SSI ONER OF I

NTERNAL

REVENUE, )

) Respondent-

Appellee

. )

Be fore : CL AY and WHI TE Circuit J udg es; and HO OD, District Judge. * HOOD , Di s t ri ct J udg e. Petitioner-Appellant Martin C. Cooper (“Petitioner” ) asks us to consider whether the Tax Court proper ly conclude d that he meant what he said in his briefing befor e that court. I n particula

r, we consider whether the Tax Court err ed when it conclude d that Petitioner had conce ded the issue of his status as an employ ee rathe r than an i n d ependent contra ctor for tax purposes in the tax y ear s 2003 and 2004 during the course of proce eding s befor e that court. We hold that, on the fac ts befor e us, it did not. Fur ther, we conclude that, contra ry to Petitioner’s argument, the Tax Court properly

declined his invitation to g ive an advisory opinion on the determination of his status once he had conce ded the issue and the Tax Court had provided an opinion on his liability for the g iven tax y ear s based on that c oncession. The decision of the T ax C ourt will be aff irmed. The appea l ha s been r efe rre d to a pane l of this court. Upon revie w, we unanimously agree that oral a rgument is not needed in this case . Fe d. R. App. P. 34(a)(2) (C).

* The Honora

ble J oseph M. Hood, United States District J udg e for the Easter n District of Kentucky , sitti ng by desig nation.I

.

Petitioner was a reg istered repr ese n t at i v e of Securities Service Networ k, Inc. (“SSN”), soliciting customers for the purcha se or sale of secur ities. During tax y ear s 200 3 an d 2 0 0 4 , SSN paid Petition er co mmissi ons, and he repor ted this income as though he was an independe nt contra ctor on his individual income tax returns for those y ear s, acc ounting for the sums paid to him by SSN on S chedule C “Profit or L oss from B usiness.” Wh e n th o s e ta

x returns wer e audited by the Interna l Revenue Service (“I RS”), Petitioner file d

a For m SS-8, Deter

mination of Worker Status for Purposes of Fe dera l Employ ment Taxes and I ncome Tax Wit hholding, on September 14, 2006, in order to deter mine whether he was an employ ee of SSN or an independe nt contra ctor. The I RS deter mined, as stated in a letter dated April 4, 2007, that Petitioner was an employ ee of SSN. In a notice of d ef iciency dated J une 19, 2007, the I RS advised P etitioner t hat t here wer e deficienc ies in his fede ral income tax pay ment for the tax y ear s 2003 and 2004, a portion of which was attributable to the deter mination that Petitioner worke d for SSN as an employ ee rathe r than an independe nt contra ctor. The I RS also assessed acc urac y -re lated penalties unde r § 6662(a ) for those tax y ear s. On September 12, 2007, Petitioner timely petitioned the Tax C o u rt for revie w of those deter minations, asser

ting that th e I R S ’ deter

mination of the amount of defic iency was incorre ct beca use he was an independe nt contra ctor, not an employ ee of SSN. Ultim at el y , o n October 23, 2009, the parties filed a joint motion f or leave to submit the case under U.S. T ax Ct. R. 122 on the basis of the pleading s and the fac ts rec ited in their stipulation of fac ts and stipu l at i o n o f settled i s s u es . I n t he stipulation of fac ts, the parties ag ree d that the “only issue rema ining for trial i s

1

U.S. Tax C t. R. 122 provides that 1 Any case not requiring a trial for the submissi on of evidenc e (as, for example, wher e sufficie nt fac ts have been admitted, stipulated, established by deposition, or included 2whether [P ]etit ioner was a common-l aw empl oy ee of [S SN] or an independe nt contra ctor, and,

t h er ef o re , whether his income and expenses . . . should be repor ted” by means of L ine 7 o f Fo rm 1040 and L ine 20 of Sche dule A or on Sche dule C for the r eleva nt period. [App’x 44.] Notwithstanding the parties’ statement that there rema ined an issue as to Petitioner’s status

as an employ ee or independe nt contra ctor, Petitioner asser ted in his pretria l memorandum, also filed

on October 23, 2009, that he had been an employ ee of SSN, not an independe nt c ontrac tor, during the re levant time per iod. Specifica lly , he wr ote as follows: I n l i gh t of the rec ent mediation/liti g ation involving SSN

. . . and the Petitioner , ad d i tional fac ts have come to light that likely support the conclusion that the Petitioner should be treated as an employ ee rathe r than an independe nt contract o r. The petitioner is awa

re that this position is contra ry to his initial complaint filed with this Court but is now uncer tain as to his actual status. [App’x 67.] He then explained that:

. . . it would appea

r that the Petitioner is an employ ee b ecause the firm executed sufficie nt control over the worke r to establish an employ er- employ ee relationship for fede ral income tax p urposes. The firm exercised control over the worke r in the following manner : (1) The Company require d that the worke r conform t o i t s own rules and those of stock exchang es and r egulatory ag encie s. (2) The Company require d approva l on all n ew ac counts and sales

. . . , any adver tisements prepa

red by the worke r . . . , and all corr espondenc e prepa red by the worke r. (3) The Company re qu i re d the worke r to participate in its Error s and Omissions I nsuranc e L eg al Def

ense a nd I ndemnity

Fund.

in the rec ord in some other way ) may be submitt ed at any time afte r joinder of issue . . . by motion of the parties filed w ith the Court. Her e, the parties’ motion for leave to submit the case was g rante d, and the case was submitt ed to the Tax Court pursuant to Rul e 122. 3(4) The Company require d all customer acc ount files to be maintained in acc ordanc e

with its own int erna l proce dures.
[App’x 67–68 (interna l citations to recor d omitted).] Petitioner conclude d his pretrial memora ndum as follows: Although the Petitioner g ener ated all of his own business, SS N

. . . exercised clea r control over the manner in which the secur ities wer e sold and the interac tion betwee n its repr esentatives and the custo m er . T h ese actions alone appea r t o be sufficient to war rant a finding by this Court that the Petitioner was an employ ee of SSN

. . . rathe r than an indepe ndent contra ctor. [App’x 68.] He late r wrote in his opening br ief, filed on January 21, 2010, that, I t is the Petitioner’s position that althoug h he g ener ated all his own business, [S SN] exercised clea

r control over the manner in which th e s ec u ri ties wer e sold and co ntrolled the interac tion betwee n the Petitioner and the customer. The co n t ro l exercised by [S SN] over the Petitioner rose above the level of mere compliance with g overnme nt regulations and war rants a finding by this Court that the Petitioner was an employ ee of

[S SN] rathe r than a

n independe nt contrac tor. [App’x 140.] I n the same brief, Petitioner discussed the common law fac tors that courts evaluate in order
to deter mine whether an individual is an employ ee or an independe nt contra ctor and conclude d that the fac tors indicated that Petitioner was an employ ee of SSN. He summarized the argument, as follows: [S SN’s] treatment of the Petitioner throug h its detailed compliance manual, toge ther with [S SN’s] rig ht to impose sanctions ag ainst the Pet i tioner for noncompliance exceed ed t h e extent of supervision require d by secur ities industry rules and established an e mploy er- employ ee r elationship. [App’x 146.] He conclude d that “Section 921(a) of the Taxpay er’ s Rel i ef Ac t of 1997 does not apply in this case ” and that the Tax Court “must issue a finding that the Petitioner was an employ ee of [SS N] for the tax y ear s 2003 & 2004.” [App’x 150.]

4I n light of the languag e in Petitioner’ s filings, the Gover nment asser

ted in its ope ning brief befor e the Tax Court that Petitioner had admitted that he was an employ ee of SSN. Petitioner then filed an a nsweringbrief de nying tha t he had made any

admission. I n that same brief, howeve r, he then stated that he “wishe[d] t o d eter mine whether or not he was misclassified as an independe nt contra ctor of [S SN] ” for the rele vant time pe riod, eff ectively reiter ating his ear lier conce ssion that he was an employ ee. [Tax Ct. Rec. No. 25, Answer ing Br

. at 7.] Wit hout rec anting his statements and argument or seeking to amend his filings, he asked the Tax Court to “dra w a defining line explaining what qualifies as permissive supervisory control under Section 921(a) of the Taxpay er’ s Relief Act of 1997 when deter mining employ

ment status of a secur ities broker deale r.” [ Id

. at 12.] He further “re quest[ed] [t hat the Tax] Court

. . . clar ify and explain the applicability of 921(a) of the Taxpay er’ s Relief Act

. . . in deter mining employ

ment status, provide g uidance on the basic elements of supervisory proce dures that wer e in place at t he ti me t he P etiti o n er wa s p erf orming his service with [ SSN] and re nder a

finding as to the Petitioner’s wor k status.” [ Id . at 12.] The Tax Court filed a Memorandum Opinion on October 5, 2010, sustaining the defic iencies attributable to the Commi ssioner’s deter mination that Petitioner worke d for SSN as an employ ee. I n its Memorandum Opinion, the Tax Court conclude d that, while the Petitioner had aver red that he

was an independe nt contra ctor and not an employ ee of SSN when he filed his Petition, “since filing his petition, petitioner has conce ded that he was an employ ee of SSN.” [App’x 162.] The Tax Court declined Petitioner’s inv itation “to ‘dra w a defining line explaining what qualifies as permissive supervisory control under section 921(a) of the Taxpay er’ s Relief Act of 1997 when deter mining employ ment status of a secur ities broker deale r for purposes of the Interna l Revenue Code’” beca use it “[was] not at liberty to issue advisory opinions when no tax controve rsy exis t[ ed].” [App’x 162.] A decision based on that Memorandum Opinion was enter ed on Dec ember 10, 2010, sustaining the rele vant def

iciencie s but concluding that no penalties we re due from Petitioner.

5Petitioner then filed a Motion to Vac ate the decision either on the g rounds that the Tax Court

err ed when it conclude d that he had conce ded that he was an e mploy ee of SSN or beca

use he w as entitled to r elief due to a

ttorney mistake beca

use his counsel articulated an argument that included

s u ch a concession under Fe d. R. Civ. P. 60(b)( 1). The Tax Court, on May 31, 2011, denied t h e motion to vacate, reje cting Petitioner’s contention that he had not conce ded that he was an employ ee of SSN and pointing out the multipl e times that Petitioner aff irmatively stated that he was an employ ee and urg ed the Tax Court to conclude the same, while never subsequently asser ting that he

was a n independe nt contrac tor during the course of briefing befor e the Tax Court. The Tax Court also reje cted his argument that he was entitled to relief under Fe d. R. Civ. P. 60(b)( 1) due to attorney mistake beca

use the opening brief ref

lected a thoroug h analy sis of the fac tors to be considere d and deliberately arg

u ed t h at h e was an employ ee, even while acknow ledg ing that the argument ran counter to the position t aken in his petition. T h i s appeal followed the Tax Court’s final decision, and this Court has jurisdictio n t o consider it by

virtue of 26 U.S.C. § 7482(a) (1). I I

. We revie w the Tax Court’s fac tual findings fo r cl ear err or. Limited, Inc. v. Comm'r of Internal Rev enue , 286 F.3d 324, 331 (6th Cir.2002) (citing Kearns v. Comm'r of Internal Rev enue , 979 F.2d 1176, 1178 (6th Cir.1992); Gross v. Comm'r of Internal Rev enue , 272 F.3d 333, 342 (6th Cir.2001)). “Unde r this standa rd, the Tax Court’s finding s of fac t w ill be overrule d only if we are ‘left with a definite and firm conviction that a mistake has been made.’ Thus, we ‘must uphold the [T] ax [C ]ourt’s acc ount of the evidenc e if it is plausible in light of the rec ord viewed in its entirety .’” Limited, Inc. , 286 F.3d at 331 (quoting Kearns , 979 F.2d at 1178; Gross , 272 F.3d at 343). The Tax Court’s leg al conclusions are subject to de n o vo re v i ew . Id

. (citing Kearns , 979 F.2d at 1178). “When revie wing mix ed questions of fac t and law, we revie w the underly ing fac tual deter

minations
6under a clea rly err oneous standard and the application of the fac ts to th e l aw u n d er a de novo standard.” Id

. (citing Friedman v. Comm'r of Internal Rev enue , 216 F.3d 537, 541 (6th Cir.2000)). I I I

. The Tax Court did not err when it conclude d that Petitioner had conce ded the issue of his
status as an employ ee of SSN rathe r than an independe nt contra ctor. The Tax Court may acc ept such

conce ssions, and, having considered t h e re co rd as a whole, we are not left with a definite or firm conviction that any mistake was made with respe ct to any finding of fac t nece ssary t o that conclusion. See NicSand, Inc. v. 3M Company , 507 F.3d 442, 458 (6th Cir. 2007) (explaining that “the plaintiff rema ins the master of its complaint” and that, if the plaintiff states in post-c omplaint pleading s filed wit h the co u rt t hat he is not bring ing or pursuing a particular claim, then t he court “should take it at its word.” ). The statements made in Petitioner’s briefs are what they are , and we need not tarry long with respe ct to this issue. Not only did Petitioner rec og nize in his br iefs that he was depar ting from the position taken in his Petition, he offe red a rea soned analy sis for his chang e of position based on the fac ts to which he had stipulated. Whil e he argued that the fac ts would “likely” support a conclusion 2 that he was an employ ee, “it would appea r that [he was] an em p loy ee,” and that cer tain fac ts “appe ar[ed] to be sufficient to wa rra nt a findingby

[t he Tax ] C ourt that [he] was a n employ ee . . . rathe r than an independe nt contra ctor,” he ultimately conclude d that the Tax Court “must” find that

Neither Petitioner nor his counsel are permitted to “eva de the conseque nces of their leg al positions 2 and litigation strateg ies, even though these m i gh t prove unsucce ssful, ill-advised, or even flatly err oneous.” McCurry ex rel Turner v. Adve ntist Health Sys. , 298 F.3d 586, 595 (6th Cir. 2002). Nor can Petitioner complain on appea l of an err or, if an err or actua lly exis ts, that he invited throug h his insistence that the Tax Court acc ept his conce ssion. See Harvis v. Roadway Express, Inc. , 923 F.2d 59, 61 (6th Cir. 1991) (“H aving induced the court to rely on a particula r err oneous proposition of law or fact, a party in the normal case may not at a l at er s tag e of the case use the error to set aside the immediate conseque nces of the err or”)

. Petitioner may now regret that he made the conce ssion that he wa s an employ ee a

nd not an independe nt contrac tor, but he ca nnot esca pe it. 7he was an employ ee of SSN. [App’x 67–68.] I t was not err or for the Tax C o u rt to conclude that

Petitioner was conce ding the issue of his status as an employ ee rathe r th an an independe nt contra ctor. 3 I V. Fur ther, the Tax Court did not er r when, having rec og nized Petitioner’s conce ssion of the issue of his status, it issued an opinion solely on the amount of the defic iency owed for the tax y ear s befor e it. To the extent that Petitioner simply wishes t h at t h e Tax Court had said more about the fac ts, it was not nece ssary to do so beca use, wher e an issue conce rning liabi l i t y o r d eficiency is ad m i t t ed in the pleading s, “no finding s of fac t are neede d to support it in the court’s opinion.” Handeland v. Comm 'r of

Internal Rev enue , 519 F.2d 327, 329 ( 9th Cir. 1975). Fur ther, fede ral courts, including the Tax Court, are “without power to decide questions that
cannot aff

ect the rig hts of litigants in the case befor e them” and h av e n o power to issue advisory opinions. North C

arolina v. Rice , 404 U.S. 244, 246 (1971) (citing Hayburn’s Case , 2 Dall. 409, 1 L

. Ed. 436 (1792); Muskrat v. United States , 219 U.S. 346, 351–53 (1911); Local No. 8 -6, Oil Chem. and Atomic W

orkers Intern. Union v. Missouri , 361 U.S. 363, 367 (1960))

. Nor is decla ratory relief available in the fede ral courts “with respe ct to Fe dera l taxes.” 28 U.S.C. § 2201(a) ; see W

. W

. W indle Co. v. Comm’r of

Internal Rev enue , 550 F.2d 43, 45–46 (1st Cir. 1977). Thus, a Tax Court’s decision is a formal deter mination of the exis tence or nonexi s t en ce o f a tax defic iency for the particula r y ear or y ear s in issue—no more and no less. See W

. W

. W indle Co. , 550 F.2d at 45; Malat

v. Comm’r of Internal Rev enue , 302 F.2d 700, 705 (9th Cir. 1962) (“The objective of a proce eding befor e the Tax Court is not to expound leg al theori es o r t o make advisory finding s or to rende r

We make no finding as to whether that conclusion was corr ect, of course . We conclude only that, 3 based on the lang uag e found in Petitioner’s pleading s, the Tax Court did not err when it conclude d that Petitioner had conc eded the issue of his status as an e mploy ee of SSN. 8advisory opinions, but to arr ive at a deter mination of how much tax, if any , the petitioner owes.” ). Since decla

ratory relief is not available in the Tax Court, once an issue is re solved for the tax y ear or y ear s in question, any

further analy sis would y ield an advisory opinion. I n light of the stipulation of fac ts and conce ssion of the issue of Petitioner’s status as an employ ee, the Tax Court properly limit ed its inquiry

to Petiti oner’ s tax defic iency as an e mploy ee of SSN for the tax y ear s 2003 and 2004. Thus, the Tax Court proper ly declined to issue an advisory opinion setting forth, as a g ener al m atter, “a defining line explaining what qualifies as permissive

s u p er v i s o ry control under Section 921(a) of t he Tax pay er’ s Relief Act of 1997 when determining employ ment status of a secur ities broker deale r.” The opinion, while obviously less than satisfying to Petiti oner, sa id all that it needed to say

. V. Acc ording ly , for all of the rea sons stated above, we AF F IRM the decision of the Tax Court.

9