Four Years ago, WC Imports redeemed all of the stock owned directly by Moshe Stein. At the time of the redemption, Moshe an his immediate family members owned 100% of the stock of WC. Moshe satisfied 3022 C (2). Thus the transaction

Qualified as a complete termination redemption and resulted in a significant long-term capital gain. WC Imports E&P at the time of the transaction exceeded the redemption proceeds. Treatment of the redemption proceeds as a dividend would have resulted in a $125,000 greater tax liability for Moshe. Currently the WC Imports has offered Moshe a consulting engagement for one year term, but options to renew can extend the contract to a total of 5 years. Moshe would be treated as an independent contractor, not as an employee of WC.

Moshe has contacted you for regarding the effect, if any, of the proposed consulting engagement of the tax treatment of his earlier stock redemption.