Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 57-80

1957-1 C.B. 324

Sec. 1402

IRS Headnote

A schochet who performs slaughtering services, in accordance with the Hebrew dietary laws, for a meat market operator, off the premises of such operator at the schochet's convenience and on a piece-work basis, and who also performs similar services for persons who bring poultry to him, is not an employee for Federal employment tax purposes of the meat market operator or the other persons for whom such services are performed.

The schochet is engaged in a `trade or business,' the income from which is includible in computing net earnings from self-employment for purposes of the Self-Employment Contributions Act of 1954.

Full Text

Rev. Rul. 57-80

Advice has been requested relative to the status, for Federal employment tax purposes, of a schochet who performs slaughtering services, in accordance with the dietary laws of the Hebrew faith, for an operator of a kosher meat market and for other persons.

In the instant case, the schochet hold himself out to the public to undertake the slaughtering of poultry in accordance with the dietary laws of the Hebrew faith, operating from his own premises for this purpose. He has regular customers who bring poultry to him for his services. In addition he has entered into an agreement with the operator of a kosher meat market, pursuant to which he slaughters, at a slaughter house owned by a third party, all poultry purchased by the meat market operator. As a matter of practice, the schohet a matter of practice, the schochet times each week to see if the operator has purchased any poultry to be slaughtered; determines his own work schedule; has not committed himself to any priority of services to the operator; receives no instructions in the performance of his services, but is guided solely by the requirements of the Hebrew dietary laws; provides whatever equipment is necessary in his work; may reject any poultry which is not acceptable to him; is paid for his services on a piecework basis; and performs no other services for the operator.

Under section 3121(d) of the Federal Insurance Contributions Act (chapter 21, subtitle C, Internal Revenue Code of 1954), the term `employee' means, among other things, any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee. Whether an individual is an employee under the usual common law rules depends upon the particular facts in each case. The guides for determining, under such rules, whether an employer-employee relationship exists are found in section 31.3121(d)-1(c) of the Employment Tax Regulations.

Under circumstances such as those present in the instant case, where a schochet performs slaughtering services for a meat market operator off the operator's premises, in accordance with his own working schedule, and with no supervision or instructions by such operator, his only guidance being the requirements set forth by Hebrew dietary law, there does not exist, under the usual common law rules, a sufficient right of control to establish a relationship of employer and employee. The same is true for the slaughtering services described above performed by the schochet on his own premises for other persons. Accordingly, the schochet is not an employee of either the market operator, or the other persons for whom he performs slaughtering services, for purposes of the Federal Insurance Contributions Act.

This conclusion is also applicable for purposes of the Federal Unemployment Tax Act and for purposes of the Collection of Income Tax at Source on Wages (chapters 23 and 24, respectively, subtitle C, Internal Revenue Code of 1954).

Section 1402 of the Self-Employment Contributions Act of 1954 (chapter 2, subtitle A, Internal Revenue Code of 1954) provides in part:

(a) NET EARNINGS FROM SELF-EMPLOYMENT.-The term `net earnings from self-employment' means the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle Subtitle A  which are attributable to such trade or business, * * *

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(c) TRADE OR BUSINESS.-The term `trade or business,' when used with reference to self-employment income or net earnings from self-employment, shall have the same meaning as when used in section 162, * * *

Whether a certain activity constitutes engaging in a `trade or business' is dependent upon all the facts and circumstances in the particular case. As a general rule, when a person is regularly engaged in an occupation or profession for profit and, as to such occupation or profession, is not regarded as an employee for purposes of the taxes imposed by the Federal Insurance Contributions Act or otherwise excluded from the self-employment provisions, he is engaged in a `trade or business.'

In the instant case, it is held that in performing services as a schochet, as set forth above, such person is engaged in a `trade or business,' the income from which is includible in computing net earnings from self-employment for purposes of the Self-Employment Contributions Act of 1954.

See Rev. Rul. 57-79, page 323, this Bulletin, setting forth circumstances under which a schochet performing slaughtering services for a poultry dealer is held to be an employee.