Wash. Court of Appeals published opinion — 323820.opn.pdf

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individual income tax return as a sole proprietorship. Dr. Armand continued to report

payments made to Drs. Loretta and Louise as miscellaneous income on Form 1099s.

Regarding the failure to file an IRS Form 1065, the commissioner used that

failure as cumulative circumstantial evidence not showing a partnership. While Dr.

Armand and the commissioner debate filing requirements, we note the penalty, not the

filing requirement, may be waived for small partnerships. Rev. Proc. 84-35, 1984-1 C.B.

509. In light of the other circumstantial evidence demonstrating a partnership was not in

existence, the issue of the failure to file a Form 1065 is not critical.

Dr. Armand argues the commissioner disregarded certain evidence tending to

show a partnership existed. First, he points to his testimony at the administrative

hearing regarding ownership of equipment where he stated the equipment is owned by

all of the dentists. No documentation supported this assertion, and the commissioner

was entitled to weigh its credibility. We do not re-weigh the credibility of witnesses. W

Ports Transp., Inc., 110 Wn. App. at 449. Second, he discusses the discretion and

control Drs. Loretta and Louise exercised in caring for their patients. While control is

relevant in establishing a partnership, doctors who are employees exercise control in

treating their patients; professional discretion is an essential element of being a doctor.

Third, he pOints to Dr. Louise's membership in the family limited liability company that

owns the building where the dental practice leases space. But this is irrelevant to

whether she is a partner in the dental practice. Fourth, Dr. Armand argues Ms. Hughes'

failure to ask if the association agreements were still valid demonstrates bias. But the