*1045 1. The Industrial Accident Commission of Maryland is a governmental instrumentality.
2. Petitioner was an employee of the commission in 1929 and the compensation received by him is exempt from Federal income tax.
*1170 Petitioner attacks respondent's determination of a deficiency in income tax for the year 1929, in the amount of $296.61. The sole issue presented is whether the compensation received by petitioner from the State of Maryland is subject to Federal income tax.
FINDINGS OF FACT.
Petitioner, a physician and surgeon, is a resident of Baltimore, where he is engaged in the practice of his profession. In 1914 he was appointed chief medical examiner of the Industrial Accident Commission of Maryland, at a salary of $2,000 per annum, and has since continuously served in that capacity and at the same salary, except for a brief period when he was in the service of the United States. His appointment was made by the commission, with the approval of the then Governor. He took the constitutional oath of office. *1046 In 1929 petitioner was a classified service employee of the State of Maryland under the merit system law of that state, having been so classified by the employment commissioner of Maryland. His compensation was paid out of the state treasury, provision therefor having been contained in the budget legislation covering the year 1929.
The State Industrial Accident Commission of Maryland is charged with the administration of the workmen's compensation law and deals with cases arising from accidental injuries to employees in hazardous occupations. Petitioner's duty was to examine claimants in all cases referred to him by the commission to determine the nature and extent of their injuries and the disabilities resulting therefrom. When necessary his examination extended over a period of observation. He also considered charges made against claimants for hospital or medical services and made recommendations to the commission respecting the reasonableness thereof. He was called upon at any time for such services in medical matters as the commission directed. He examined only those claimants referred to him by the commission; he gave no treatment, his duties being confined to the examination. *1047 He made written reports to the commission respecting his findings and recommendations on forms supplied him. Such reports become a part of the record in the cases but are not binding upon the commission. None of the members of the commission were physicians; they made no attempt to influence or direct petitioner in his examinations or reports. Generally the *1171 commission accepted petitioner's findings as to the nature of the injuries sustained but did not always accept his conclusions or recommendations respecting the rating as to the disability of the claimant. Occasionally he was called upon for supplemental reports, or to testify in a case, or to examine claimants outside the city of Baltimore. The commission had preference as to his time, and petitioner devoted as much time to his duties as was required. He was furnished an office by the commission and, during the period here involved, attended it three afternoons each week, continuing his work until the examinations were completed. The claimants examined by him during these hours ranged in number from five to twenty each day. Occasionally, claimants were referred to petitioner by the commission at his private*1048 office or at hospitals, but he received no additional compensation therefor.
Petitioner was free to, and did, engage in private practice. In 1929 his professional earnings from this source were in excess of $39,000. He also served as a lecturer on oral surgery at the University of Maryland. Respondent has included in petitioner's income for 1929 the salary paid him as medical examiner, and from that action arises the deficiency herein.
OPINION.
GOODRICH: Again we must determine the relationship between a taxpayer and his state government that we may decide whether the compensation paid him for his services by the state may be subjected to the Federal income tax. Petitioner contends that he was either an officer or an employee of the State of Maryland, rendering services to one of its instrumentalities engaged in the discharge of an essential function of government and, consequently, his salary may not be levied upon by the United States. ; art. 643, Regulations 74. The record discloses that there attached to him some of the characteristics of both classifications. Authority for his appointment was given by statute; *1049 an oath of office was required of him, and the appointment was approved by the chief executive of the state. (Sec. 5, art. 101, Bagby's Code.) He was classified as an employee under the state law (art. 64-A, Bagby's Code); his compensation, upon a salary, not a fee basis, was appropriated by legislative act and paid him from the funds of the state. His services were regular and continuous, and in general were prescribed, and not limited to the accomplishment of a particular object. ; ; affirming ; .
Respondent does not deny that the commission was an agency of the state engaged in carrying out an essential function of government - see *1172 chapter 800, Acts 1914, Maryland; - but maintains that petitioner was neither an officer nor employee of the state, but an independent contractor. He argues that, since no member of the commission was a physician, the commission failed to ratain the right to control petitioner's services*1050 fully, as it could not direct him as to how his work should be done, as well as what he should do, citing , and other cases. With that we disagree. In our opinion, petitioner was an employee of the commission, and therefore of the state. . As we see it, the commission fully controlled petitioner's services, not only as to the tasks to which they should be applied, but also as to the method by which the work should be accomplished. Petitioner did not undertake the usual duties of surgeon to patient' his work was strictly limited to examinations of such persons as were sent to him. The commission told him what it wanted done, when to do it, and how to accomplish and report his work. His results, it accepted or rejected as it saw fit; if dissatisfied with them, it directed him to take further action in the matter. The record shows that he was continuously at the call and direction of the commission. True, the members of the commission could not tell him how to interpret the sounds transmitted to him through his stethescope, the conclusions to be made from his*1051 observations in tests of muscle and nerve, or the meaning of conditions revealed by blood count. Such things were beyond their knowledge; and that they might have such information respecting the cases pending before them they retained petitioner, who, by the application of his medical training and skill, could advise them in these matters. Respondent would have us say that, because petitioner's examinations called for the exercise of training and knowledge different from that possessed by the members of the commission, he was beyond their control in conducting those examinations and, consequently, could not be an employee. In our opinion, such a construction of the term "control", in view of the circumstances here obtaining, is too narrow. Should the term require that the members of the commission be able to do what petitioner was employed to do for them, which is the effect of respondent's argument, it would follow that an expert stenographer could not be an employee for the reason that the commission members perhaps were unable to write in the cryptic hieroglyphics known as shorthand and could not give instructions as to which keys of the typewriter should be pressed with certain*1052 fingers in order to obtain the maximum of speed and accuracy. The decision in , relied on by respondent, is distinguishable upon its facts from the case at bar.
Judgment will be entered for the petitioner.