Rev. Rul. 57-12

The N company, a motor freight carrier, is unable to use its regular employees to unload its trucks in certain areas because of local employment conditions. It engages members of local unions for unloading its trucks at delivery points in such areas. These individuals are engaged and perform their services on an irregular basis, but under circumstances which constitute them employees of the company. They are paid daily by the company at hourly rates fixed by the union for this type of work. Because of the irregular nature of the work of a particular employee, the frequency with which wage payments are made to the many employees involved, and the small amounts of the individual wage payments, a question has been raised relative to the necessity of having the Federal income tax and the employee tax (social security tax) deducted and withheld therefrom. Held , the N company, as the employer, is required to deduct and withhold the Federal income tax under section 3402 of the Internal Revenue Code of 1954 and the employee tax imposed under section 3101 of the Federal Insurance Contributions Act (chapter 21, subtitle C, of the 1954 Code) from the `wages,' as that term is defined in sections 3401 and 3121 of the Code, paid by it to such employees for their services, irrespective of the frequency of the payments and the small amount of each individual wage payment. The N company is respeonsible for the return and payment of such taxes, whether or not collected from the employee. See Rev. Rul. 55-543, C.B. 1955-2, 400. There are no provisions in the statute to relieve the employer from his liability for withholding of the Federal income and the employee social security taxes from the `wages' paid and for making the returns and payments with respect to such taxes.