§1401 — Rate of tax

2000), is overruled.

Weiss' understanding, neither the primary text ofthe regulation nor Example 4 (which speaks to an individual who, unlike Mr. Weiss, received disability retired pay under 10 U.S.C. sec. 1401 - 15 - (2000)) provides authority for excluding his retired pay from gross income under the circumstances presented in this case.

1401. Self-employment income consists ofgross income derived by an individual from any trade or business carried on by the individual. Sec. 1402(a). The self-employmenttax, however, does not apply to compensation paid to an employee.

Section 1401 imposes a tax upon a taxpayer's self-employment income. - Self-employment income consists of gross income derived by an individual from any trade or business carried on by such an individual. Sec. 1402(a). The self-employment tax, however, does not apply to compensation paid to an employee.

Section 1401 imposes a tax on the self-employment inco~n of every individual, including the income earned by an American citizen working in a foreign country . See Duncan v . Commissioner, 86 T .C . 971, 972 (1986) . While section 911 excludes foreign earned income from gross income under certainl circumstances, section 911 does not apply to self-employment income .

Because the relevant facts are stipulated and only a legal issue remains, we need not decide whetherthe burden ofproofshifts to respondent.

We need not decide that question because our decision on petitioners’ 1997 self-employment tax liability does not depend on the burden of proof.

5 Petitioners reported a self-employment income tax liability pursuant to section 1401.

Accordingly, the 2009 FSP * * * distributions are subject to self-employment tax pursuant to section 1401.

We hold, on the basis oftheir deemed admissions, that petitioners are not entitled to the American Opportunity Credit for any ofthe tax years at issue.

duction of$26,464 for 2011, as claimed, and of$11,255 for 2012, as corrected.2 The remaining issues for decision are: (1) whetherpetitioners are entitled to the section 911 foreign earned income exclusion for the 2011 and 2012 taxable years, (2) whetherpetitioners are liable for self-employment tax pursuant to section 1401, and (3) whether petitioners are liable for the accuracy-related penalty under section 6662(a).

We hold that petitioner is entitled to a deduction of$400 for license expenses.

Accordingly, petitioner is not liable for self-employmenttax pursuant to section 1401 on income earned from Ever Care in 2010.

to 2006, 2007, and 2008, respectively, are deductible pursuant to section 404(a);1 and 1Unless otherwise indicated, all section references are to the Internal (continued...) SERVED Nov 25 2013 - 2 - [*2] (2) whether distributions petitioners received during 2009 are subject to self- employmenttax pursuant to section 1401.

We hold that the amount is zero.

We hold that she is not liable.

We hold that the Floods are not entitled to a deduction for investment interest expense for 2005.

Accordingly, we hold that petitioners are not entitled to claim cost ofgoods sold for 2006 or 2007 in addition to that allowed in the notice ofdeficiency.

It follows, and we hold, that the net income arising from his psychiatric practice during the years in issue, including any amounts paid to Robucci P.C.

Accordingly, we hold that petitioner is liable for the section 72(t) (1) 10-percent additional tax on the distribution she received from the IRA.

Accordingly, we hold that 'petitioners are liable.for self-employment tax of $836 on $5,592 of nonemployee compensation, see sec.

Because we hold that the Swansons earned the income, they are liable for the self-employment tax imposed by section 1401 and entitled to the related deduction under section 164(f).

2) required to report gambling winnings he received; (3) required to report interest he received; (4) required to report self- employment income he received; (5) entitled to deduct certain trade or business expenses on Schedule C, Profit or Loss From Business; and (6) liable for self-employment tax pursuant to section 1401.

Accordingly, we hold that petitioner failed to report $9,363 of gross receipts from his Schedule C businesses.

96 23,688 1997 24,444 1998 18,700 With the exception of the compensation that petitioner received from Renaissance in 1998, respondent determined that all other items of gross income for each year in issue constitute net - 5 - earnings from self-employment subject to the tax imposed on such income pursuant to section 1401.

After concessions, the sole issue for decision is whether petitioners are liable for self-employment tax under section 1401 on payments they received under the U.S.

ACA § 1401(a), 124 Stat. at 213, enacted section 36B, which allows a refundable tax credit, known as the PTC.5 The PTC assists eligible taxpayers with the costs of their premiums for health insurance purchased through an Exchange. See § 36B. A taxpayer generally qualifies for the PTC if she has household income that is equal to an amount that is at least 100%, but not greater than 400%, of the federal poverty line amount for the taxpayer’s family size for the taxable year. § 36B(c)(1)(A); Treas.

The sole issue for decision is - 2 - whether petitioner is liable, pursuant to section 1401,1 for self-employment tax.

ure. - 2 - Respondent determined a deficiency in petitioner's Federal income tax for 1994 in the amount of $744.2 The issue for decision is whether petitioner's earnings from his Schedule C business activity are subject to self-employment tax under section 1401. Some of the facts have been stipulated and are so found. The stipulations of fact and attached exhibits are incorporated herein by this reference. Petitioner resided in Ragley, Louisiana, on the date the petition was filed in this case.

In the notice of deficiency respondent determined that the amounts petitioner received from State Farm as termination payments constituted income from self-employment within the meaning of section 1401, and, therefore, were subject to self- employment tax.

Self-employment Taxes Section 1401 imposes a tax on the "the self-employment income" of every individual.

In the notice of deficiency respondent determined that the amounts petitioner received from State Farm as termination payments constituted income from self-employment within the meaning of section 1401 and, therefore, were subject to self-employment tax.

Petitioners contend that Hathaway was a statutory employee under section 3121(d)(3)(D) in 1989 and 1990, and thus, by operation of Rev. Rul. 90-93, 1990-2 C.B. 33, petitioners properly reflected Hathaway’s business-related income and expenses on Schedule C in calculating adjusted gross income under section 62(a)(1). In the alternative, p

Edwards's self-employment within the meaning of section 1401 and, therefore, were subject to self-employment tax .

Section 1401 imposes self-employment tax on self-employment income. Section 1402 defines net earnings from self-employment as the gross income derived by an individual from the carrying on of any trade or business by such individual less allowable deductions attributable to such trade or business. Respondent argues that the law firm was a partnersh

--- MAJORITY --- OPINION Beghe, Judge: Respondent determined petitioners are liable under section 1401 for self-employment tax of $5,764 with respect to their 1997 tax year.

After concessions, the issues for decision are whether petitioner for tax year 2010: (1) is liable for self-employmenttax under section 1401; (2) is entitled to an interest expense deduction under section 163; (3) is entitled to a business expense deduction under section 162;² and (4) is liable for additions to tax under sections 6651(a)(1) and (2) and 6654(a).3 FINDINGS OF FACT Some ofthe facts are stipulated and are so found.

esulting from the entities' self-employment earnings shall be computed as part ofthe Rule 155 calculations. - 34 - [*34] accounting under section 453. Additionally, the entities did not properly report net income from self-employment earnings under section 1401. The Court has considered all ofpetitioners' contentions and argun ents. To the extent not discussed herein, we conclude that they are meritless, moot, or irrelevant. To reflect the foregoing, Decisions will be entøred under Rule 155.

d and that stated that he had earned $17,200 in “Wages, tips, and other compensation”. Petitioners reported business income of $1,020 from Rand’s work as a tutor. Lastly, they deducted $72 for one-half of the self-employment tax liability imposed by section 1401. In total petitioners reported that their adjusted gross income was $18,148. This income was reduced to zero by various deductions. Petitioners claimed a standard deduction of $10,900 and a deduction of $14,000 resulting from four person

The issues for decision are: (1) whether and ifso to wh t extent petitioner had unreported income for the years in issue; (2) whether petitioner is liable for self- employmenttax under section 1401 for the years in issue; (3) whether petitioner was required to file Federal income tax returns for the years in issue; (4) whether petitioner is liable for additions to tax under section 6651(f) for fraudulent failure to file Federal income tax returns for the years in issue; (5) whether petitioner is

It follows, and we hold, that the net income arising from his psychiatric practice during the years in issue, including any amounts paid to Robucci P.C. and Westsphere, was self-employment income of Dr. Robucci subject to self-employment tax under section 1401. II. Imposition of the Accuracy-Related Penalty A. Applicable Law Section 6662(a) and (b) (1)-(3) provides for an accuracy- related penalty (the penalty) in the amount of 20 percent of the portion of any underpayment attributable to, amon

s of $176,100 for 2001 and $32,758 for 2002, should be treated as ordinary income or the proceeds from the sale of a capital asset (we conclude that the payments are ordinary income), (2) whether the Kennedys are liable for self-employment tax under section 1401 on the same payments (we conclude that they are liable), and (3) whether the Kennedys are liable for the accuracy-related penalty under section 6662 for each of the tax years 2001 and 2002 (we conclude that they are not liable for the pe

On the basis of our finding that petitioners earned income in their real estate trade or business, they are subject to tax on their net earnings under section 1401 and to a deduction under section 164(f).

tled to certain itemized deductions for the years at issue ; (3) whether petitioner is entitled to a claimed Schedule E, Supplemental Income and Loss, rental expense deduction for 2001 ; (4) whether petitioner is liable for self-employment tax under section 1401 for 2001, 2002, and 2003; (5) whether petitioner is liable for fraud penalties under section 6663 for 2000, 2001, and 2002, or alternatively, accuracy-related penalties under section 1( .

Section 1401 imposes a percentage tax on self-employment income of every individual . See Jackson v . Commissioner, 108 T .C . 130 (1997) . Self-employment income is defined as "the net earnings from self-employment derived by an individual * * * during any taxable year" . Sec . 1402(b) . The term "net earnings from self-employment" is defined as "

itioners properly reported the gross receipts of their business ; (2) whether petitioners are entitled to the business expense deductions they claimed on their returns; (3) whether petitioners are liable for tax on self-employment income pursuant to section 1401 ; (4) whether petitioners are liable for an addition to tax for failure to file timely pursuant to section 6651(a)(1) ; and (5) whether petitioners are liable for accuracy-related penalties pursuant to section 6662 .

and asserted penalties under sec. 6662, I.R.C., which Ps contested primarily on the basis of tax protester arguments. Held: Ps are liable for the deficiencies determined by R for 1999, 2000, 2001, and 2002 including self-employment taxes pursuant to sec. 1401, I.R.C., and a capital gain for 2001. Held, further, Ps are liable for penalties under sec. 6662, I.R.C., for 1999, 2000, 2001, and 2002. Larry J. Lundgren and Anita L. Lundgren, pro sese. Joan E. Steele, for respondent. - 2 - MEMORANDUM FI

ermination increasing trust income (reportable by Harlan) in the foregoing amount. VI. Self-Employment Tax Respondent determined that the net income from the flooring business constituted Harlan’s net income from self-employment, taxable pursuant to section 1401. Petitioners offered no evidence with respect to this issue. There is accordingly no shift in the burden of proof to respondent under section 7491(a). Section 1401 imposes a tax on self-employment income, defined generally as “the net ea

Section 1401 imposes self-employment tax on self-employment income. Section 1402 defines net earnings from self-employment as the gross'income derived by an individual from the carrying on . of any trade or business by such individual less allowable deductions attributable to such trade or business. - 17 - We conclude in accordance with section 14

2001 taxable years. Held: P received unreported income in the form of wages and nonemployee compensation during 1999, 2000, and 2001, upon which he is liable for Federal income taxes. Held, further, P is liable for self-employment taxes pursuant to sec. 1401, I.R.C., on income earned in the form of nonemployee compensation during 2000 and 2001. Held, further, P is liable for the sec. 6651(a)(1), I.R.C., addition to tax for failure timely to file income tax returns for each of the years in issue

ons”), (2) whether New Dimensions withheld Federal income tax with respect to petitioner’s unreported compensation income, and (3) whether petitioner’s unreported compensation income constitutes self- employment income subject to the tax imposed by section 1401. Unless otherwise indicated, all section references are to the Internal Revenue Code in effect at relevant times, and all Rule references are to the Tax Court Rules of Practice and Procedure. Some of the facts have been stipulated and are

Self-employed individuals are also liable for self-employment tax pursuant to section 1401 as part of their Federal income tax liability.

Self-Employment Income Respondent determined that petitioners were liable, pursuant to section 1401, for tax on self-employment income relating to all the years in issue.

Self-Employment Income Respondent determined that petitioners were liable, pursuant to section 1401, for tax on self-employment income relating to all the years in issue.

We thus hold petitioner is liable for the self-employment tax under section 1401 on his Schedule C earnings for 1993, 1994, and 1995, as determined in the notice of deficiency.

ination payments because petitioners failed to prove that Mr. Farnsworth had any basis in the DMAA contract. We further hold that the DMAA “contract value” termination payments included in petitioners’ income are subject to self-employment tax under section 1401. FINDINGS OF FACT Most of the facts have been stipulated and are so found. The stipulation of facts and related exhibits are incorporated by this reference. Petitioners were residents of Redding, California, when they filed their petitio

Section 1401 imposes a tax on “the self-employment income of every individual”. Section 1402(b) defines self-employment income as “the net earnings from self-employment”. Section 1402(a) defines self-employment earnings as “gross income derived by an individual from any trade or business carried on by such individual, less the deductions * * * whic

Self-Employment Tax From the evidence in the record, the Court concludes that petitioner is liable for the self-employment tax under section 1401 on his Schedule C earnings.

Section 1401 imposes self-employment tax on self-employment income. Section 1402 defines net earnings from self-employment as the gross income derived by an individual from the carrying on - 14 - of any trade or business by such individual less allowable deductions attributable to such trade or business. We agree with respondent. We conclude that

The Castros disagree, arguing only that the jewelry business was carried on by the CCJT and not by petitioner. The Castros asserted no argument with respect to the net earnings of the jewelry business in the event we held that the trusts should be disregarded for Federal income tax purposes. 12In light of our holding, we need not address

Self-Employment Tax Section 1401 provides that a tax shall be imposed on the self-employment income of every individual.

We agree with respondent that this additional $9,440 is subject to self-employment tax under section 1401, and petitioners are entitled to a corresponding 50-percent deduction under section 164(f).

Adjustments in the notice of deficiency relating to self- employment tax under section 1401 and the deduction under section 164(f) for one-half the self-employment tax are mechanical matters.2 The resolution of these adjustments depends solely on 1 Petitioner concedes that he failed to include $305 of interest income from Chase Bank on his return.

- 42 - Section 1401 provides that a tax shall be imposed, in addition to other taxes, on the self-employment income of every individual. Self-employment income generally includes an individual’s net earnings from self-employment in any trade or business, a partner’s distributive share of income or loss from any trade or business carried on by a partnershi

The Castros disagree, arguing only that the jewelry business was carried on by the CCJT and not by petitioner. The Castros asserted no argument with respect to the net earnings of the jewelry business in the event we held that the trusts should be disregarded for Federal income tax purposes. 12In light of our holding, we need not address

The sole issue for decision is whether petitioner's earnings from two trade or business activities and one farming activity - 22 - are subject to self-employment tax under section 1401,1 or whether such earnings are exempt under section 1402(g) by reason of petitioner's conscientious objection to acceptance of benefits under the Social Security system for death, disability, old age, retirement, and other related benefits.

On December 9, 1998, respondent mailed petitioner notices of deficiency in which respondent determined that petitioner: (1) Received self-employment income of $5,524, $19,986, $17,165, and $23,329 relating to 1993, 1994, 1995, and 1996, respectively; and (2) was liable for income tax and, pursuant to section 1401, self-employment tax.

- 5 - Section 1401 imposes a tax on the self-employment income of every individual for old age, survivors, disability insurance, and hospital insurance. See sec. 1401(a) and (b); Beachy v. Commissioner, T.C. Memo. 2000-125; Greene v. Commissioner, T.C. Memo. 2000-26; sec. 1.1401-1(a), Income Tax Regs. Self- employment income “means the net earnings from

etitioner failed to report income from wages, nonemployee compensation, interest, dividends, and capital gain upon which petitioner is liable for individual Federal income taxes; (2) whether petitioner is liable for self-employment taxes pursuant to section 1401 on income earned in the form of nonemployee compensation; and (3) whether petitioner is liable for the section 6651(a)(1) addition to tax for failure to timely file income tax returns for the taxable years 1992 through 1996.

Accordingly, we hold that the amounts underreported represent income from self-employment - 15 - subject to self-employment tax under section 1401 and that the Friscias may deduct one-half of the self-employment tax paid under section 164(f).

(a) 1995 $27,031 $5,406.20 1996 68,194 13,638.80 - 2 - The issues for decision are: (1) Whether the amounts deposited into petitioners’ bank accounts are income or nontaxable gifts; (2) whether respondent counted certain deposits twice when determining petitioners’ deficiencies; (3) whether petitioners are liable for the self-employment tax under section 1401;1 and (4) whether petitioners are liable for accuracy- related penalties pursuant to section 6662(a).

Accordingly, we hold that the amounts underreported represent income from self-employment - 15 - subject to self-employment tax under section 1401 and that the Friscias may deduct one-half of the self-employment tax paid under section 164(f).

r taxable year 1988; (4) whether petitioner is liable for an addition to tax for failure to file a Federal income tax return pursuant to section 6651(a)(1) for taxable year 1988; (5) whether petitioner is liable for self- employment tax pursuant to section 1401 for taxable years 1988 and 1989; and (6) whether petitioner is liable for additions to tax for failure to pay estimated income tax pursuant to section 6654 for taxable years 1988 and 1989.1 FINDINGS OF FACT The parties have stipulated som

OPINION Section 1401 provides that a tax shall be imposed on the self-employment income of every individual. Generally, rentals from real estate are excluded from the computation of net earnings from self-employment. Sec. 1402(a)(1). However, section 1402(a)(1) also provides that rentals derived by the owner or tenant of land are not excluded from the comp

- 6 - OPINION Section 1401 provides that a tax shall be imposed on the self-employment income of every individual.

OPINION Respondent contends that the settlement awards and royalties petitioner received in 1993 and 1994 are subject, pursuant to section 1401, to self-employment tax.

OPINION Section 1401 provides that a tax shall be imposed on the self-employment income of every individual. Generally, rentals from real estate are excluded from the computation of net earnings from self-employment. Sec. 1402(a)(1). However, section 1402(a)(1) also provides that rentals derived by the owner or tenant of land are not excluded from the comp

, however, over whether the tax on self-employment income is applicable to the income that petitioner earned as a minister during those years. In addition to other taxes, an individual's self-employment income is subject to a tax imposed pursuant to section 1401. Subject to irrelevant exceptions, self-employment income is defined as the "net earnings from self-employment derived by an individual * * * during any taxable year." Sec. 1402(b). "Net earnings from self-employment" include the gross i

Section 1401 imposes a tax on the self-employment income of every individual. An individual's self-employment income depends on his "net earnings from self-employment". Sec. 1402(b). In relevant part, the term "net earnings from self- employment" means the gross income derived by an individual from any trade or business carried on by such individua

The only issue the Court must decide is whether - 2 - petitioner is liable for self-employment tax under section 1401 on income received for the performance of off-duty security services.

(2) Whether petitioner is liable for self-employment taxes under section 1401 for the years in issue.

Wilson (Jasmine and Brandy Wilson) as dependents for the years in issue; (4) entitled to file her returns for the years in issue using head of household rates; (5) liable for self-employment tax pursuant to section 1401 for each of the years in issue; (6) liable for the addition to tax under section 6651(a) for failure to timely file her 1993 return; and (7) liable for the accuracy-related penalty provided by section 6662(a) for each of the years in issue.

At trial, petitioners introduced into evidence a (continued...) - 9 - Self-Employment Tax Section 1401 provides that a tax shall be imposed on the self-employment income of every individual.

Section 1401 imposes self-employment tax on self-employment income. Section 1402 defines net earnings from self-employment as the gross income derived by an individual from the carrying on of any trade or business by such individual less allowable deductions attributable to such trade or business. We agree with respondent. We conclude that petition

he extent set out below. (2) Whether for 1992 petitioners are entitled to a claimed dependency exemption for their daughter Jacqueline. We hold they are not. (3) Whether for 1991 and 1992 petitioners are liable for self- employment taxes pursuant to section 1401. We hold they are. (4) Whether for 1991 and 1992 petitioners are liable for fraud penalties pursuant to section 6663, or in the alternative, the accuracy-related penalties pursuant to section 6662. We hold they are not liable for the fra

arital status or whether petitioner has any children. Respondent determined that because of petitioner's receipt of nonemployee compensation in the amount of $20,309 from Masterguard in 1988, petitioner is subject to self-employment tax - 6 - under section 1401. Petitioner asserts that he was not self- employed in 1988 and therefore is not liable for the self- employment tax. Discussion Petitioner invoked the jurisdiction of this Court by a petition alleging that respondent had erred in determin

Self-Employment Tax Section 1401 imposes a tax on the self-employment income of every individual.

- 23 - Section 1401 imposes a tax on an individual's net earnings from self-employment. Self-employment income consists of gross income from any trade or business carried on by an individual less allowable deductions attributable to the trade or business. Sec. 1402(a). Respondent's determination that petitioner is liable for self-employment tax is presume

Self-Employment Tax Section 1401 imposes a tax on the self-employment income of every individual.

Ortiz' unreported income in 1991 and 1992 was subject to self-employment taxes under section 1401 and to an adjustment in his self-employment tax deduction in each year.

8 as commissions expenses. OPINION Respondent determined that the income petitioner received from the companies on the sales made by his down-line distributors is income from petitioner's trade or business and is subject to self-employment tax under section 1401. Petitioners assert that the royalty income is not earned income nor income from petitioner's trade or business and is therefore not subject to self-employment tax. Respondent's determination is presumed - 6 - correct, and petitioners be

ithin the meaning of sec. 6501(e)(1)(A), I.R.C., such that R is not barred from assessing deficiencies for those years by the 3-year statute of limitations of sec. 6501(a), I.R.C. Held, further, P is not liable for self- employment taxes pursuant to sec. 1401, I.R.C., on gross income omitted from his returns for 1989 and 1990. Held, further, accuracy-related penalties for negligence pursuant to sec. 6662(a), I.R.C., for 1989 and 1990 are sustained. David W. Gray, for petitioner. Aubrey C. Brown,

Whether petitioner, pursuant to section 1401, is liable for self-employment tax.

Whether petitioner is liable for the self-employment tax imposed by section 1401 for 1992 and 1993.

OPINION Section 1401 provides that, in addition to other taxes, a tax shall be imposed on the self-employment income of every individual.

- 18 - Respondent determined that petitioner's income for each of the years in issue is subject to self-employment tax under section 1401, and petitioner has not disputed this determination.

whether petitioner, pursuant to section 1401, is liable for self-employment tax; 3.

income, subject to correction for the $258 mistake in her favor. Accordingly, we sustain petitioner on this issue. Petitioner's self-employment tax was increased by respondent. A taxpayer is liable for self-employment tax on net earnings pursuant to section 1401. Net earnings are defined as "the gross income derived by an individual from any trade or business carried on by such individual," less the allowable deductions pertaining to such trade or business. Sec. 1402(a). It is not disputed that

Lencke received as residual premiums and in lieu of renewal commissions constitute income from self-employment within the meaning of section 1401 and, therefore, were subject to self- employment tax.

Whether petitioners, pursuant to section 1401, are liable for self-employment tax.

Whether petitioners are liable for self-employment tax under section 1401 for the years in issue.

Subject to irrelevant exclusions, self-employment income means net earnings from self-employment. Sec. 1402(b). Net earnings from self-employment generally include gross income derived from any trade or business carried on by the individual, less allowable deductions attributable to such a trade or business, plus the individual's distrib

Self-Employment Tax Section 1401 provides for a tax on the self-employment income of every individual.

Self-Employment Tax Section 1401 imposes a tax on net earnings of $400 or more from self-employment income, defined as gross income derived from carrying on a trade or business, less allowable deductions.

After concessions,2 the issues for decision are: (1) Whether the proceeds of a settlement entered into between petitioner and his former employer are excludable from income under section 104(a)(2); (2) whether petitioner is liable for self-employment tax under section 1401 with respect to such proceeds; and (3) whether petitioner is liable for an accuracy- related penalty for negligence or disregard of rules or regulations pursuant to section 6662(a).

Section 1401 imposes taxes on the self-employment income of every individual, and this is in addition to the ordinary income tax. Section 1402(a) defines an individual's net earnings from self-employment as the "gross income derived by an individual from any trade or business carried on by any such individual", and, in turn, section 1402(b) defines

cy in petitioners' 1991 Federal income tax in the amount of $1,121. The issue for decision is whether certain income earned by Jeffrey S. Kaiser constitutes earnings from self-employment within the meaning of section 1402, subject to tax imposed by section 1401. FINDINGS OF FACT Some of the facts have been stipulated, and they are so found. Petitioners filed a joint Federal income tax return for the year 1991 (the 1991 return). Jeffrey S. Kaiser resided in Dallas, Texas, and Gail F. Kaiser resid

Whether petitioner, pursuant to section 1401, is liable for self-employment tax.

Section 1401 imposes a tax on self-employment income of individuals. Respondent properly determined that petitioners are liable for self-employment tax on their respective business incomes in 1990 and 1991. Section 164(f) provides a deduction to an individual of an amount equal to one-half of the taxes imposed by section 1401 for the taxable year.

OPINION Section 1401 provides that, in addition to other taxes, a tax shall be imposed on the self-employment income of every individual. Generally, rentals from real estate are excluded from the computation of net earnings from self-employment. Sec. 1402(a)(1). There is an exception to the exclusion, however, with respect to: any income derived by the own

Anderson is subject to self-employment tax under section 1401 for the years at issue; and (5) petitioners are liable for additions to tax under sections 6651(a)(1) and (2) and 6654.

For instance, section 1401 imposes a tax on self-employment income, and section 1402(a) defines net earnings from self-employment as the gross income derived by an individual from the carrying on of any trade or business by such individual less allowable deductions attributable to such trade or business.

Self-Employment Tax Section 1401 imposes a percentage tax on the self-employment income of every individual.

Tax on Net Earnings from Self-Employment Section 1401 imposes a tax on the self-employment income of every individual.

Functional Analysis Test Section 1401 imposes a tax on every individual’s self-employment income for a taxable year.

Self-Employment Tax Section 1401 imposes self-employment tax on self-employment income.

As to the credit, ACA § 1401 created section 36B, which allows an “applicable taxpayer” a refundable credit equal to the PTC amount of the taxpayer for the taxable year.

More specifically, a partnership is required to determine the entity 15 status of its direct partners and “to report perfunctorily its ordinary income as [net earnings from self-employment] except to the extent that the ordinary income was allocated to a direct partner that was a limited partner.” Olsen-Smith, 90 T.C.M (CCH) at 66

Section 1401 imposes a tax “on self-employment income . . . for [the] taxable year.” § 1401(a). “In the case of a husband and wife filing a joint return . . . the [self-employment tax] shall not be computed on the 56 [*56] aggregate income but shall be the sum of the taxes computed . . . on the separate self-employment income of each spouse.” § 60

, Mr. Clemons operated as an IT consultant and received deposits into his bank accounts for his efforts. The income derived from these activities constitutes “self-employment income” under section 1402 and is subject to the self-employment taxes of section 1401. 2. UBS Investment Income Through his UBS account, Mr. Clemons received dividend income and income from trading PFIC assets in 2003 through 2008. See I.R.C. § 1297. The Commissioner determined PFIC income and tax according to section 1291

- 4 - shown on the return, $6,146 consisted of the income tax imposed by section 1, and $16,465 consisted of the tax imposed by section 1401, the tax on net earnings from self-employment.3 A paid income tax return preparer prepared the return.

at 213, created section 36B, which provides that taxpayers meeting certain requirements are eligible for the PTC.

Section 1401 of the ACA (124 Stat. at 213) created section 36B, which provides certain specified taxpayers a Federal income tax credit equal to the PTC amount for the taxable year. Sec. 36B(a), (b), and (c); see McGuire v. Commissioner, 149 T.C. 254, 258-260 (2017). The PTC subsidizes the cost of health insurance purchased through a health insuranc

In addition to other taxes, section 1401 imposes self-employment tax on the amount of self-employment income for each taxable year.

Self-Employment Tax Section 1401 imposes a tax on self-employmentincome ofevery individual.

36B(d)(2)(A); see also sec.

tent both are allowable by law and properly substantiated, and (b) books in the amount of$38 (the amount claimed by petitioner). Respondent also concedes that ifpetitionerwas an amateur gambler, petitioner is not subject to self-employment tax under sec. 1401 (and is not entitled to a deduction for one-halfofsuch tax under sec. 164(f)). Further, respondent concedes that petitioner is not liable for the accuracy-related penalty under sec. 6662. Finally, the adjustment in the notice ofdeficiency r

Section 1401 imposes a tax upon a taxpayer's self-employment income. Self-employment income means the "net earnings from self-employment" derived by an individual during the taxable year. Sec. 1402(b). Subject to exceptions, the "net earnings from self-employment" include a partner's distributive share of partnership trade or business income. Sec.

Section 1401 imposes a tax upon a taxpayer's self-employment income. Self-employment income means the "net earnings from self-employment" derived by an individual during the taxable year. Sec. 1402(b). Subject to exceptions, the "net earnings from self-employment" include a partner's distributive share of partnership trade or business income. Sec.

Petitioner's Income Section 61(a) provides that gross income generally includes "all income from whatever source derived, including * * * [c]ompensation for services, including fees, commissions, fringe benefits, and similar items".

other than his own, and thereafter correctly reported. Mr. Becker has not done so. Mr. Becker and Ms. Castro are not entitled to a COGS allowance for the 2007 tax year. (Mr. Becker's method also leads to an understatement ofself-employmenttax under section 1401.) 2. Returns and Allowances Mr. Becker claims he is entitled to deductions of$132,650 for 2009 and $24,000¹6 for 2010 for "returns and allowances" expenses. These deductions represent amounts he claims he paid back to 1040 Plus that were

The income in question is subject to self- employment tax under section 1401 because the income was earned through Mr.

The income in question is subject to self- employment tax under section 1401 because the income was earned through Mr.

The income in question is subject to self- employment tax under section 1401 because the income was earned through Mr.

The income in question is subject to self- employment tax under section 1401 because the income was earned through Mr.

other than his own, and thereafter correctly reported. Mr. Becker has not done so. Mr. Becker and Ms. Castro are not entitled to a COGS allowance for the 2007 tax year. (Mr. Becker's method also leads to an understatement ofself-employmenttax under section 1401.) 2. Returns and Allowances Mr. Becker claims he is entitled to deductions of$132,650 for 2009 and $24,000¹6 for 2010 for "returns and allowances" expenses. These deductions represent amounts he claims he paid back to 1040 Plus that were

Section 1401 imposes a tax upon each individual's "self-employment income". Section 1402(b) defines "self-employment income" as "net earnings from self-employment" with certain exceptions not relevant here. Section 1402(a) defines "net earnings from self-employment" as "gross income derived by an individual from any trade or business carried on by

Section 1401 imposes a tax upon each individual's "self-employment income". Section 1402(b) defines "self-employment income" as "net earnings from self-employment" with certain exceptions not relevant here. Section 1402(a) defines "net earnings from self-employment" as "gross income derived by an individual from any trade or business carried on by

Section 1401 imposes a tax on "self-employment income". Self-employment income is any income "derived by an individual from any trade or business carried on by that individual."4 To state it more simply, to determine whether income is subject to self-employmenttax we must determine whether the income was "(1) derived, (2) from a trade or business,

other than his own, and thereafter correctly reported. Mr. Becker has not done so. Mr. Becker and Ms. Castro are not entitled to a COGS allowance for the 2007 tax year. (Mr. Becker's method also leads to an understatement ofself-employmenttax under section 1401.) 2. Returns and Allowances Mr. Becker claims he is entitled to deductions of$132,650 for 2009 and $24,000¹6 for 2010 for "returns and allowances" expenses. These deductions represent amounts he claims he paid back to 1040 Plus that were

other than his own, and thereafter correctly reported. Mr. Becker has not done so. Mr. Becker and Ms. Castro are not entitled to a COGS allowance for the 2007 tax year. (Mr. Becker's method also leads to an understatement ofself-employmenttax under section 1401.) 2. Returns and Allowances Mr. Becker claims he is entitled to deductions of$132,650 for 2009 and $24,000¹6 for 2010 for "returns and allowances" expenses. These deductions represent amounts he claims he paid back to 1040 Plus that were

other than his own, and thereafter correctly reported. Mr. Becker has not done so. Mr. Becker and Ms. Castro are not entitled to a COGS allowance for the 2007 tax year. (Mr. Becker's method also leads to an understatement ofself-employmenttax under section 1401.) 2. Returns and Allowances Mr. Becker claims he is entitled to deductions of$132,650 for 2009 and $24,000¹6 for 2010 for "returns and allowances" expenses. These deductions represent amounts he claims he paid back to 1040 Plus that were

The income in question is subject to self- employment tax under section 1401 because the income was earned through Mr.

Self-EmploymentTax on AZR's Passthrough Income Section 1401 imposes a tax upon a taxpayer's self-employment income.

Self-EmploymentTax on AZR's Passthrough Income Section 1401 imposes a tax upon a taxpayer's self-employment income.

Section 1401 imposes an additional tax on an individual's self-employment income for any taxable year. The record establishes, and petitioner does not dispute, that he received a total of$42,918 in compensation for services he provided to Diamond Ranch and Timberline Framers during 2010 and that he was not an employee ofeither entity during that ye

Section 1401 imposes a tax upon self-employment income; section 1402 provides instructions for calculating the amount. As relevant to this case, section 1402(a) provides: SEC. 1402(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 o

Self-EmploymentTaxes Section 1401 imposes a tax on the "self-employment income" ofevery individual.

ble tax credit to 3All section references are to the Internal Revenue Code in effect for the year in issue, unless otherwise indicated. - 8 - offset the cost ofhealth insurance for those who qualify. Id. sec. 1501, 124 Stat. at 242; sec. 5000A; ACA sec. 1401, 124 Stat. at 213; sec. 36B; ACA sec. 1311, 124 Stat. at 173. The individual mandate is enforced by the imposition ofa penalty on individuals who do not maintain qualifying health insurance coverage. Sec. 5000A; ACA sec. 1501. The exchanges

Section 1401 imposes a tax on net earnings, defined in section 1402(a), derived by an individual from carrying on a trade or business. From petitioner's testimony it appears that he was performing services for Burlingame with continuity and regularity and that his primary purpose in engaging in the activities was for income or profit. Thus his acti

The IMF withheld no tax from his earnings--not the tax imposed by section 1, the self-employmenttax imposed by section 1401, or the FICA (Federal Insurance Contributions Act) tax imposed by sections 3101(a) and 3111(a).

The issues for consideration are whether petitioner is liable for: (1) self- employment tax under section 1401, and (2) additions to tax under section 6651(a)(1) and (2).

petitionerwas liable for self-employmenttax of$6,765 and $7,594 for 2011 and 2013, respectively, and that he was entitled to corresponding deductions under section 164(f) (allow- ing as a deduction "an amount equal to one-halfofthe taxes imposed by section 1401"). For 2013 petitioner claimed personal exemption deductions under section 151 for himselfand four children. The notice ofdeficiency disallowed the depen- dency exemption deductions claimed for the children "since another taxpayerhas als

Section 1401 imposes a tax on "self-employment income." Section 1402 defines self-employment income as "net earnings from self-employment" which it defines as "the gross income derived by an individual from any trade or business carried on by such individual." Sec. 1402(a) and (b). Section 1402(c) tells us that the phrase "trade or business" means

Guarino (petitioner) received from Platt Properties (Platt) in 2008 constitutes net earnings from self-employment subject to the section 1401 tax on self-employment income; (2) petitioners are entitled to deductions for losses sustained in a rental real estate activity; and (3) petitioners are liable for a section 6662(a) accuracy-related penalty for either year in issue.

Petitioner did not challenge this determination in his petition. - 29 - [*29] a debt". As discussed supra, petitioner's argument is the type offrivolous argument that this Court and the U.S. Court ofAppeals for the Tenth Circuit have consistently rejected. See e.g., Lonsdale, 919 F.2d at 1448; Carskadon v. Commissioner, 2003 WL 21904166

Self-EmploymentTax Section 1401 imposes a tax on an individual's self-employment income, which is defined as the "net earnings from self-employment" derived by an individual during a taxable year.

Section 1401 imposes a percentage tax on self-employment income ofevery individual. Self-employment income is defined as: "the net earnings from self-employmentderived by an individual * * * during any taxable year." Sec. 1402(b). "Net earnings from self-employment" is defined as the gross income derived from any trade or business carried on by suc

- 8 - [*8] Section 1401 imposes, in addition to other taxes, a tax "on the self-employ- ment income ofevery individual." The income petitioner received from the three clients listed above was "self-employment income." We accordingly sustain re- spondent's determination that petitioner is liable for self-employmenttax in the amount set forth in the notice ofde

esulting from the entities' self-employment earnings shall be computed as part ofthe Rule 155 calculations. - 34 - [*34] accounting under section 453. Additionally, the entities did not properly report net income from self-employment earnings under section 1401. The Court has considered all ofpetitioners' contentions and argun ents. To the extent not discussed herein, we conclude that they are meritless, moot, or irrelevant. To reflect the foregoing, Decisions will be entøred under Rule 155.

d to which petitioner or location, we find that petitioners have failed to 4Petitioners' argument that it made no difference where Farm's telephone expense was deducted is rejected ifonly because ofthe effect the deduction would have on petitioner's sec. 1401 tax (tax on self-employment income). - 9 - show that they are entitled to a deduction for telephone expenses in excess ofthe amount respondent allowed. B. Miscellaneous Expenses Petitioners offered no explanation for the $25 deduction for m

esulting from the entities' self-employment earnings shall be computed as part ofthe Rule 155 calculations. - 34 - [*34] accounting under section 453. Additionally, the entities did not properly report net income from self-employment earnings under section 1401. The Court has considered all ofpetitioners' contentions and argun ents. To the extent not discussed herein, we conclude that they are meritless, moot, or irrelevant. To reflect the foregoing, Decisions will be entøred under Rule 155.

Petitioner testified that he continued to have knee pain after retiring from the Navy and that he eventually elected to have knee replacement surgery in 2009. -4- Petitioner acknowledged at trial that he has never submitted to a medical examination at a Department ofVeterans Affairs (VA) facility nor received a disability rating from th

s at issue) of$800,152, $1,185,194, $1,025,626, and $828,745.91, respectively; (2) whether petitioner is entitled to Schedule C deductions in amounts greater than those respondent allowed; (3) whetherpetitioner is liable for self-employmenttax under section 1401; (4) whetherpetitioner is liable for additions to tax under section 6651(f);³ and (5) whetherpetitioner is liable for additions to tax under sections 6651(a)(2) and 6654.

The letter further stated that the Coast Guard would withhold Federal income tax from his monthly retirement payments. Mr. Campbell subsequently began to receive monthly retirement pay of$403 (offset by $50 allotted to survivor benefits and $20 for Federal income tax withholding). -5- C. Mr. Campbell's Communications With the Coa

3W Payment Section 1401 imposes a tax on the "self-employment income" ofevery individual.

Self-EmploymentTax Section 1401 generally imposes a self-employmenttax on the self- employment income ofevery individual.

Section 1401 imposes a tax on self-employment income ofevery individual. Self-employmentincome is defined as "the net earnings from self-employment derived by an individual * * * during any taxable year". Sec. 1402(b). The term "net earnings from self-employment" is defined as "the gross income derived by - 10 - an individual from any trade or bus

1401 note.4 This provision has the effect ofpreservingparity betweentaxpayers who spend their entire careers working in the United States and those who spend part oftheir careers working abroad. No credit or deduction can be claimed against Federal taxable income for U.S. social security taxes. In order to prevent disparity oftreatment, SSA se

This provision has the effect of preserving parity between taxpayers who spend their entire careers working in the United States and those who spend part of their careers working abroad. No credit or deduction can be claimed against Federal taxable income for U.S. social security taxes. In order to prevent disparity of treatment, SS

- 3 - [*3] deduct Desert Academy's losses for those years; (4) whether, under section 1401, petitioners are liable for self-employmenttax on the ordinary income, ifany, from Desert Academy for 2005 and 2006; and (5).whetherpetitioners are liable for accuracy-relatedpenalties under section 6662(a) for 2005 and 2006.

1401; see also sec. 1.1401-1(a), Income Tax Regs. Self-employmentincome generally is defined as "the net earnings from self- employment derived by an individual"." Sec. 1402(b). Section 1402(a) defmes "net earnings from self-employment" as follows: "With respect to the old-age, survivors, and disability tax imposed by sec. 1401(a), sec. 1402(b

1401; see also sec. 1.1401-1(a), Income Tax Regs. Self-employmentincome generally is defined as "the net earnings from self- employment derived by an individual"." Sec. 1402(b). Section 1402(a) defmes "net earnings from self-employment" as follows: "With respect to the old-age, survivors, and disability tax imposed by sec. 1401(a), sec. 1402(b

Abdallah offiling self-employmenttax returns under section 1401, Vuvo and Mr.

The issues for decision as to all years in issue are: (1) whetherpetitioners must include in their gross income the amounts respondent determined using the bank deposits method; (2) whether petitioners are liable for self-employmenttax under section 1401; and (3) whether petitioners are liable for additions to tax under sections 6651(a)(1)1 and (2) and 6654(a).

tates and in 2001 was extradited from New Zealand. In 2002 Palmer was found guilty by ajury ofdefrauding the IRS and was sentenced to Respondent also determined, and petitioner does not dispute, that petitioner is liable for self-employmenttax under sec. 1401 on her unreported business income and is entitled to corresponding self-employmenttax deductions. - 28 - [*28] prison. In 2004 petitionerjoined a class action suit against Palmer that is still pending. Although petitioner did not discover t

Section 1401 imposes an additional tax on the self-employment income ofevery individual, both for old age, survivors, and disability insurance and for hospital insurance. Self-employmentincome is generally defined as "the net earnings from self-employment". Sec. 1402(b). Section 1402(a) defines "net earnings from self-employment" as "the gross inco

Section 1401 imposes a tax on an individual's self-employment income, which is defined as the "net earnings from self-employment" derived by an individual during a taxable year. Sec. 1402(b). "Net earnings from self- employment" is the gross income derived by an individual from any trade or business carried on by that individual less the deductions

The issues for decision as to all years in issue are: (1) whetherpetitioners must include in their gross income the amounts respondent determined using the bank deposits method; (2) whether petitioners are liable for self-employmenttax under section 1401; and (3) whether petitioners are liable for additions to tax under sections 6651(a)(1)1 and (2) and 6654(a).

tates and in 2001 was extradited from New Zealand. In 2002 Palmer was found guilty by ajury ofdefrauding the IRS and was sentenced to Respondent also determined, and petitioner does not dispute, that petitioner is liable for self-employmenttax under sec. 1401 on her unreported business income and is entitled to corresponding self-employmenttax deductions. - 28 - [*28] prison. In 2004 petitionerjoined a class action suit against Palmer that is still pending. Although petitioner did not discover t

Applicable Law Section 1401 imposes a tax on the "self-employment income" ofevery individual.

ned he received. Petitioner does not dispute that respondent's allocations under the community property rules were proper. Petitioner does not dispute that some ofthe income received was self-employment income subject to the self-employmenttax under section 1401. Rather, petitioner spends his time arguing that he does not owe income tax on the basis ofa myriad oftax-protester arguments. Petitioner's arguments are without merit and lack factual and legal foundation, and "we are not obligated to e

- 10 - [*10] OPINION Section 1401" imposes a tax on the self-employment income ofevery individual.

1401; see also sec. 1.1401-1(a), Income Tax Regs. Self-employment income generally is defined as "the net earnings from self- employment derived by an individual". Sec. 1402(b). Section 1402(a) defines "[n]et earnings from self-employment" as follows: SEC. 1402(a). Net Earnings From Self-Employment.--The term 'net earnings from self-employment

1401 (2006) (specifying who shall be nationals and citizens ofthe United States at birth); see also id. sec. 322, 8 U.S.C. sec. 1433 (2006) (permitting aparent who is a citizen ofthe United States to apply for naturalization on behalfofa child born outside ofthe United States who has not acquired citizenship automatically under INA sec. 320, 8

Self-EmploymentTax Section 1401 imposes a tax on the "self-employment income" ofev'ery individual.

Section 1401 imposes a tax on self-employment income'. Self- employment income is defined as the gross income derived from any trade or business activity, less deductions. Sec. 1402(a) and (b). As a result of the adjustments to the Schedule C gross receipts and expenses, the Williamses' self-employment income is greater than the amount reported on

Section 1401 imposes self-employment tax on self-employment income . Section 1402 (a') defines net earnings from self-employment as "the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed * * * which are attributable to such trade or business". Mr. Norwood provided his service

Whether the Petitioners Are Liable for Self-Employment Tax on the Compensation Received by Agripina Smith in 2003, 2004, and 2005, by Sandra Joseph in 2004 and 2005, and by Candace Kelly in 2004 and 2005 for Services as Members of the Tribal Council Section 1401 imposes a tax on the "self-employment income" of every individual.

Liability for Self-Employment Tax Respondent determined that the $593,125 and $943,192 paid to Rovakat in 2002 and 2003, respectively, were self-employment -59- income." Section 1401 imposes a tax on self employment income.

Self-Employment Tax Section 1401 imposes a tax on the self-employment income of every individual .

Self-Employment Taxes Section 1401 imposes self-employment tax on self-employment income.

1401 imposes, in addition to other taxes, a- tax of 12.40 percent on the self-employment income of every individual. One-half - of this tax- is then deductible from adjusted gross income (AGI) under sec. 164(f) (1). Sec. 1402(b) defines "self- employment, income" as an individual's "net earnings from self- employment". Sec. 1402(a) defines "ne

Self-Employment Tax Section 1401 imposes a tax on the self-employment income of every individual .

l income tax for the taxable year 2005 of $4,769 . After concessions, the central issue for decision is whether th e $16,974 received by petitioners from the State of Illinois t o care for their granddaughter is subject to self-employment ta x under section 1401 . For the reasons discussed below, we hol d that it is not . Background At the time the petition was filed, petitioners resided in the State of Illinois . During the taxable year at issue, petitioners cared for their young granddaughter

Section 1401 imposes a tax on self-employment income for old age, survivors, disability insurance, and .hospital insurance . Sec . 1401'(a) and (b) ; sec. 1 .1401-1(a), Income Tax Regs .4 Petitioner's liability for self-employment tax therefore turns-on whether he had self-employment income . Services performed as an independent contractor give ris

Section 1401 imposes taxes on self-employment income, defined generally as the "net earnings from self-employment derived by an individual" . Sec . 1402(b) . Net earnings from self-employment are "the gross income derived by an individual from any trade or business carried-on-by-such individual, less the deductions allowed by this subtitle which ar

Section 1401 imposes a tax on the self-employment income of every individual . Section 1402(b) defines "self-employment income" as an individual's "net earnings from self-employment" . On brief, respondent asserts that "Petitioners earned the income as sole proprietors, and therefore, their income is subject to the self-employment tax ." Petitioner

Self-employment income has been explained, as follows : Section 1401 imposes a tax on self-employment income attributable to a taxpayer from any trade or business carried on by the taxpayer .

The $9,500 deficiency determined in that notice of deficiency takes into account the omitted items (without any offsetting deductions), the disallowance of the earned :.income credit, and the imposition-of a section 1401 self- employment tax on.

-8- Discussion Self-Employment Tax Under section 1401 self-employment income of individuals is subject to self-employment tax .

-8- Discussion Self-Employment Tax Under section 1401 self-employment income of individuals is subject to self-employment tax .

Marlin is liable for self- employment tax under section 1401 for each of the years at issue .

Exemption From Self-Employment Tax Section 1401 imposes a tax on an individual's self- employment income, based on the "net earnings from self- employment" derived by an individual during the taxable year .

Section 1401 imposes a percentage tax on self- employment income of every individual . See Baker v . Commissioner , T .C . Memo . 2001-283 . Self-employment income is defined as "the net earnings from self-employment derived by an individual * * * during any taxable year" . Sec . 1402(b) . The term "net earnings from self-employment" is defined as

To reflect the foregoing, An appropriate order and decision will be entered .

In addition to the income tax imposed by section 1, section 1401 imposes a tax on the self-employment income of individuals .

Self-Employment Tax Section 1401 imposes a tax on the self-employment income of every individual .

Under section 1401, self-employed taxpayers, including independent contractors, are liable for a tax on self-employment income . See Jones v . Commissioner , T .C . Memo . 2007-249; Jackson v . Commissioner , 108 T .C . 130, 133-134 (1997) ; Allen v. Commissioner , T .C . Memo . 2005-118 ; Turnidge v . Commissioner, T .C . Memo . 2003-169 . - 13 - Self-

Section 1401 imposes a tax on the self-employment income of individuals . Self-employment income means the net earnings from self-employment derived by an individual . Sec . 1402(b) . Respondent determined that the net profit petitioner received from the operation of Sam Transportation constituted self- employment income and, consequently, petition

Self-Employment Tax Section 1401 imposes self-employment tax on self-employment income .

Self-Employment Tax Section 1401 imposes a tax on the self-employment income of individuals.

Self-Employment Tax Section 1401 imposes a percentage tax on self-employment income of every individual .

Section 1401 imposes a tax on self-employment income of every individual for old age, survivors, and disability insurance, and for hospital insurance. Sec. 1401(a) and (b); Schelble v. Commissioner, 130 F.3d 1388, 1391 (10th Cir. 1997), affg. T.C. Memo. 1996-269. Self-employment income is “the net earnings from self-employment derived by an individ

y donations do not meet the requirements of section 1.170A-13(a)(1), Income Tax Regs. See Blair v. Commissioner, T.C. Memo. 1988-581. - 10 - Self-employment Tax During his testimony petitioner objected to being subject to the self-employment tax of section 1401. When asked by the Court if he had filed for an exemption, he replied: “I’ve never filed for anything, sir.” To obtain an exemption from the self- employment tax, a taxpayer must file for an exemption according to regulations prescribed b

was premature. Held: Following a concession by R, P is liable for the remaining deficiencies, except for an adjustment for a reduced share of income from one LLC in 1999, determined by R for 1999 and 2000 including self-employment taxes pursuant to sec. 1401, I.R.C. Held, further, P is liable for a penalty under sec. 6662, I.R.C., for 1999 and 2000. - 2 - Sue Taylor, pro se. Cameron M. McKesson, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION ·WHERRY, Judge: Respondent determined Federa

and asserted penalties under sec. 6662, I.R.C., which Ps contested primarily on the basis of tax protester arguments. Held: Ps are liable for the deficiencies determined by R for 1999, 2000, 2001, and 2002 including self-employment taxes pursuant to sec. 1401, I.R.C., and a capital gain for 2001. Held, further, Ps are liable for penalties under sec. 6662, I.R.C., for 1999, 2000, 2001, and 2002. Larry J. Lundgren and Anita L. Lundgren, pro sese. Joan E. Steele, for respondent. SERVED AUG 2 3 2006

61(a)(2)) is subject to taxes under section 1401 (self-employment taxes), in addition to the section 1 taxes on income.

Section 1401 imposes an additional tax on the self-employment income of every individual, both for old age, survivors, and disability insurance and for hospital insurance. The term “self-employment income” denotes “net earnings from self-employment”. Sec. 1402(b). “Net earnings from self-employment”, in turn, means “the gross income derived by an i

as not a statutory employee but was engaged in a self-employed trade or business activity. Accordingly, respondent determined that, after adjustments to the claimed expenses, the net income from the activity was subject to self-employment tax under section 1401. Corben did not consider petitioner to be an employee and, therefore, withheld no income tax and paid no Social Security taxes on the compensation paid to petitioner. Adjusted gross income generally consists of gross income less trade or

61(a)(2)) is subject to taxes under section 1401 (self-employment taxes), in addition to the section 1 taxes on income.

Section 1401 imposes an additional tax on the self-employment income of every individual, both for old age, survivors, and disability insurance and for hospital insurance. The term “self-employment income” denotes “net earnings from self-employment”. Sec. 1402(b). “Net earnings from self-employment”, in turn, means “the gross income derived by an i

Self-Employment Tax Section 1401 imposes self-employment tax on self-employment income.

The second issue is whether petitioners are liable for self-employment taxes for 1999, 2000, and 2001 under section 1401 based on the aforesaid income.

iolent episode that prompted petitioner to call the police in order to have her former spouse removed from the marital residence. The resultant police report noted petitioner’s former spouse’s substance abuse and 2 The unpaid balance consists of the sec. 1401 self- employment tax and sec. 1 income tax on the self-employment income of petitioner’s former spouse. - 5 - petitioner’s concern that her former spouse might harm her or her son. The potential for violence and her concerns for the safety

Self-Employment Tax Section 1401 imposes a tax on self-employment income, defined generally as “the net earnings from self-employment derived by an individual” for old-age, survivors, and disability insurance.

Respondent determined that petitioner is liable for additional self-employment tax under section 1401 of $5,339 for 1999 and $4,313 for 2000 and that he may deduct under section 164(f) self-employment tax of $2,671 for 1999 and $2,157 for 2000.

.274-5T(c), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985), for any year at issue. 9 In connection with that determination, respondent allowed a corresponding deduction in each year of one-half of the self- employment taxes imposed by sec. 1401. See sec. 164(f)(1). 10 To the extent that petitioners may again be invoking Rev. Rul. 59-354, supra, we note that, although the ruling does not address self-employment taxes, it does state that other salaried employees of tribal councils (

Section 1401 imposes tax on self-employment income. Section 1402 defines net earnings from self-employment as the gross income derived by an individual from the carrying on of any trade or business by such individual less allowable deductions attributable to such trade or business. Respondent argues that petitioner is a "qualified real estate agent

Respondent determined that petitioner is liable for additional self-employment tax under section 1401 of $5,339 for 1999 and $4,313 for 2000 and that he may deduct under section 164(f) self-employment tax of $2,671 for 1999 and $2,157 for 2000.

Under section 1401, individuals are liable for tax on self- employment income. Self-employment income is defined as “gross income derived by an individual from any trade or business carried on by such individual”. Sec. 1402(a). In general, an individual’s performance of services as an employee does not give rise to self-employment income. Sec. 1402(c)(2)

- 9 - Section 1401 imposes a tax on an individual’s self-employment income. The self-employment tax is imposed on net earnings of $400 or more derived by an individual from a trade or business carried on by him. Sec. 1402(a) and (b). Petitioner did not prove that respondent’s determination of his liability for self-employment tax was incorrect. We conclu

tax under section 402(d) is equal to five times the tax, computed using the rate for unmarried individuals, on one-fifth of the “total taxable amount of the 7Sec. 402(d) was repealed by the Small Business Job Protection Act of 1996, Pub. L. 104-188, sec. 1401, 110 Stat. 1787, for taxable years beginning after Dec. 31, 1999. - 11 - lump sum distribution” less the “minimum distribution allowance.” Sec. 402(d)(1)(B). In order to qualify for forward averaging under section 402(d)(1), the distributio

s entitled to the cost of goods sold and the deduction for “other expenses--rent” as claimed on his Schedule C. 3 The computational matters, each of which involves both of the taxable years in issue, are: (1) The amount of self- employment tax under sec. 1401; and (2) the amount of the self- (continued...) - 3 - I. Background Some of the facts have been stipulated, and they are so found. At the time that the petition was filed, petitioner resided in Houston, Texas. A. Petitioner’s Occupation Pet

hat petitioner is liable for income tax deficiencies on the above compensation. Similarly, given petitioner’s concession that the $8,122 and $17,181 amounts constitute nonemployee compensations, these amounts are subject to self-employment tax under section 1401. B. Additions to Tax Section 7491(c) places on the Commissioner the burden of production regarding additions to tax. The burden with respect to “reasonable cause, substantial authority, or similar provisions” then shifts to the taxpayer.

Section 1401 imposes a tax on an individual's net earnings from self-employment. "Net earnings from self-employment" are defined as the gross income derived by an individual from any trade or business carried on by such individual, less deductions. There is no question about the fact 4 that petitioner carried on his real estate activity for a peri

Section 1401 imposes a tax on the self-employment income of individuals. Self-employment income means the net earnings from self- employment derived by an individual. Sec. 1402(b). In general, - 12 - net earnings from self-employment means the gross income derived by an individual from any trade or business that he or she carries on, reduced by al

OPINION Section 1401 imposes a percentage tax on self-employment income of every individual. See Baker v. Commissioner, T.C. Memo. 2001-283. Self-employment income is defined as “the net earnings from self-employment derived by an individual * * * during any taxable year”. Sec. 1402(b). The term “net earnings - 117 - from self-employment” is defined as “t

Petitioner has not specifically disputed this determination, and nothing in the record indicates that this amount was other than “self- employment income” within the meaning of sec.

The “total tax” liability reported on the - 4 - joint return, i.e., $13,643, takes into account the section 1 tax applicable to the taxable income reported on the joint return and the section 1401 tax (self-employment tax) applicable to the net profit reported on the Schedule C.

Section 1401 imposes a tax on the “self-employment income” of every individual. Section 1402(b) defines “self-employment income” as “net earnings from self-employment”. Section 1402(a) generally defines “net earnings from self-employment” as gross income derived by an individual, less deductions allowed. It is well established that earnings derived

Section 1401 imposes an additional tax on the self- employment income of every individual for old-age, survivors, disability insurance, and for hospital insurance. The term “self-employment income” refers to the net earnings derived by the individual from self-employment in a trade or business. Sec. 1402(a) and (b); Spiegelman v. Commissioner, 102

After reviewing respondent’s calculation of petitioner’s tax liability, detailed above, we conclude that this calculation has been made in accordance with the provisions of the Internal Revenue Code, and that the amounts of income tax and self- - 4 - employment income tax are the correct amounts imposed by section 1 and section 1401, respectively, on this income.

The Federal income tax liability of $5,769 reported on the return consists of a section 1 income tax liability of $2,419 and a $3,350 section 1401 tax on self-employment income.

Self-Employment Tax Respondent contends that the entire settlement amount, including the cancellation of indebtedness, is subject to self- employment tax under section 1401 because the amount received was compensation for services under petitioner’s employment contract.

Self-Employment Tax Section 1401 imposes a tax on the self-employment income of every individual for old age, survivors, and disability insurance, and hospital insurance.

Subject to exclusions not relevant to this case, self-employment income means net earnings from self-employment. Sec. 1402(b). Net earnings from self-employment include, inter alia, an individual’s distributive share, whether or not distributed, of income or loss (as described in section 702(a)(8)) from any trade or business carried on b

Separately, section 1401 imposes a tax “on the self- employment income of every individual”.

Self-Employment Tax Section 1401 imposes a tax “on the self-employment income of every individual”.

Whether Petitioner Is Liable for Self-Employment Tax Section 1401 imposes a tax on the self-employment income of every individual for old age, survivors, disability insurance, and hospital insurance.

ucky’s income. In the notices of deficiency sent to petitioners, respondent determined that the Keno lotteries constituted a trade or business of Lucky and that petitioners’ respective share of Lucky’s income was subject to self-employment tax under section 1401. Discussion Section 1401 imposes a tax on self-employment income. Self- employment income includes gross income less allowable deductions from a taxpayer’s trade or business and income derived from a trade or business carried on by a par

Self-Employment Tax Section 1401 imposes a tax on an individual’s self- employment income.

n addition to $11,471 of omitted income conceded by petitioner, he received an additional $8,000 (total omitted income from this source of $19,471). Employee or Independent Contractor An independent contractor is subject to self-employment tax under section 1401. Sec. 1402(a). Whether an individual is an employee or independent contractor is a factual question to which common law principles apply. Secs. 3101, 3121(d)(2); Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 (1992); Weber v. Comm

Discussion Section 1401 imposes a tax on self-employment income from a taxpayer’s trade or business.

Section 1401 of the Senate amendment as reported by the Finance Committee proposed to add a new section, section 469, relating to limitations on losses and credits from passive activities. Neither the House bill, nor the President’s Proposals contained a corresponding provision. H. Conf. Rept. 99-841, II-137 (1986), 1986-3 C.B. (Vol. 4) 137; Joint

Quintero earned and received from AAA Transmissions Service Center of North Miami, Florida (AAA), during 1997; (2) whether such compensation constitutes self- employment income subject to the tax imposed by section 1401; and (3) whether the underpayment of tax required to be shown on petitioners’ 1997 Federal income tax return is a substantial understatement of income tax.

Section 1401 imposes a tax on the self-employment income of individuals. Self-employment income means the net earnings from self- employment derived by an individual. Sec. 1402(b). In general, net earnings from self-employment means the gross income derived by an individual from any trade or business that he or she carries on, reduced by allowable

on for bad debt under section 166. II. Self-Employment Tax The next issue is whether the net profits and losses of petitioners’ Schedule C businesses are attributable to - 12 - Mr. Dunnegan or Mrs. Dunnegan for purposes of self-employment tax under section 1401. Petitioners attributed 50 percent of the profit and loss from the Schedules C for the fireworks businesses located in Moriarty, Dennings, and Kansas City to Mrs. Dunnegan in 1993. Respondent determined that 100 percent of the net profits

ucky’s income. In the notices of deficiency sent to petitioners, respondent determined that the Keno lotteries constituted a trade or business of Lucky and that petitioners’ respective share of Lucky’s income was subject to self-employment tax under section 1401. Discussion Section 1401 imposes a tax on self-employment income. Self- employment income includes gross income less allowable deductions from a taxpayer’s trade or business and income derived from a trade or business carried on by a par

The sole issue for decision is whether petitioners are liable for self-employment tax under section 1401 on value-added payments that they received in 1994 and 1995 from an agricultural cooperative of which they were active members.

Discussion Section 1401 imposes a tax on self-employment income from a taxpayer’s trade or business.

st, gross income derived from business, and income from discharge of indebtedness (DOI). See sec. 61(a)(2), (4), (12). In addition to the tax imposed on income under section 1, self-employment income is subject to a self-employment income tax under section 1401. Self-employment income is defined generally as the gross income, less certain allowable deductions, derived by an individual from any trade or business carried on by such individual. See sec. 1402(a) and (b). As noted above, petitioner m

Section 1401 imposes a tax on an individual’s self- employment income. Self-employment income is defined as “net earnings from self-employment”. Sec. 1402(b). The term “net earnings from self-employment” is defined as an individual’s gross income from a trade or business carried on by such individual less the deductions attributable to such trade o

ring that. I didn’t bring the details”. She did have a notary seal. Accordingly, we allow - 8 - her to exclude $100 from self-employment income as income from services as a notary public. The remaining $9,140 is subject to self-employment tax under section 1401. Petitioner is entitled to the corresponding deduction under section 164(f) on all self- employment tax imposed by section 1401. Section 6651(a)(1) imposes an addition to tax for failure to file a return on time. The addition equals 5 per

The issues for decision are: (1) Whether, and if so to what extent, petitioner underreported his 1995 income; (2) whether any unreported income is subject to the tax imposed by section 1401; and (3) whether any underpayment of tax required to be shown on petitioner’s 1995 Federal income tax return is due to negligence.

Section 1401 imposes a tax upon a taxpayer's self-employment income. Self-employment income includes the net earnings from self-employment derived by an individual during the taxable year. Sec. 1402(b). Net earnings from self-employment consist of gross income derived by an individual from any trade or business carried on by such individual, less t

self-employment tax liability. According to petitioner, California’s community property laws must be taken into account not only in determining his section 1 tax liability, but also in determining his liability for the self-employment tax imposed by section 1401. In addition to other taxes, an individual's self-employment income is subject to a self-employment tax. See sec. 1401. 3 Unless otherwise indicated, section references are to the Internal Revenue Code of 1986, in effect for 1995. - 4 -

It is well established that the obligation to pay self- employment taxes is mandatory so long as the requirements of section 1401 are met.

in issue, (3) whether decedents’ capital gain income should be increased for 1989,3 (4) whether decedents’ taxable Social Security income should be increased for each of the years 1985 through 1990, (5) whether decedents’ self-employment taxes under section 1401 should be increased for each of the years in issue, 2 A transferee’s liability generally is limited to the value of the assets received from the transferor.

ain of $27,944 for 1988, net operating loss deductions of $74,749 and $85,000 for 1987 and 1988, respectively, and decreases in interest income of $747 and $288, for 1987 and 1988, . ¹ Respondent also determined increased self-employment taxes under sec. 1401. Petitioners have not separately challenged those determinations, which, we assume, are derivative of respondent's principal adjustments. We do not further discuss the self-employment tax adjustments. - 11 - respectively. Respondent accepts

in issue, (3) whether decedents’ capital gain income should be increased for 1989,3 (4) whether decedents’ taxable Social Security income should be increased for each of the years 1985 through 1990, (5) whether decedents’ self-employment taxes under section 1401 should be increased for each of the years in issue, 2 A transferee’s liability generally is limited to the value of the assets received from the transferor.

Whether Petitioners Are Liable for Self-Employment Tax on the Net Income From the Sports Memorabilia Activity Section 1401 imposes a tax on a taxpayer's self-employment income.

Their 1989 return also reflects a section 1401 self-employment tax of $208.32, and an earned income credit of $222, resulting in a refund claim for $13.68.

Accordingly, petitioner is also entitled to a deduction in the amount of one-half of the self-employment tax, as stated by respondent in the notice of deficiency. See sec. 164(f)(1). Finally, respondent made a computational adjustment disallowing petitioner’s claimed earned income credit. The record does not establish that petitioner had

etitioner of her concern for her brother, Robert J. Stern (Mr. Stern). While 1 In the answer, respondent contended that the amounts petitioner Mary H. Muegge received for services that she provided Mr. Stern were subject to self-employment tax under sec. 1401. Petitioners concede this issue on brief. - 3 - Ms. Stern was dying, petitioner promised Ms. Stern that she would check on Mr. Stern. Shortly after Ms. Stern died, petitioner began to visit Mr. Stern from time to time to check on his well-

Self-Employment Tax Section 1401 imposes a tax on an individual’s self- employment income, which is defined as the net earnings from self-employment derived by an individual during the taxable years.

Section 1401 imposes a tax on an individual's "self-employ- ment income". As applicable here, the term "self-employment income" means the net earnings from self-employment derived by an individual during any taxable year, sec. 1402(b), and the term "net earnings from self-employment" means the gross income derived by an individual from any trade or

Tax on Self-Employment Income Section 1401 imposes a two-part tax on the self-employment income of every individual.

Section 1401 imposes a tax on an individual's self-employment income. Self-employment income is the net earnings derived by an individual from any trade or business carried on by that person. See sec. 1402(a) and (b). Petitioner contends that he had no self-employment income because Arivada is a trust for Federal tax purposes. We disagree. Petition

Self-Employment Tax On brief, respondent contends that petitioner "is liable for self-employment tax on all of the income he earned." Section 1401 imposes a tax on the self-employment income of every individual.

OPINION Section 1401 imposes a tax on the self-employment income of every individual. Self-employment income is defined as "net earnings from self-employment". Sec. 1402(b). The term "net earnings from self-employment" is defined as gross income derived by an individual from a trade or business carried on by such individual less the deductions attributable

Self-Employment Income Section 1401 imposes a tax on "self-employment income", which is generally defined as the gross income, less allowable deductions, derived by an individual from any trade or business carried on by him during the taxable year.

Section 1401 imposes self-employment tax on self-employment income. Section 1402(a) defines net earnings from self- employment as the gross income derived by an individual from the carrying on of any trade or business by such individual less allowable deductions attributable to such trade or business. Petitioner did not dispute that his C.P.A. busi

e sustain respondent's determination that petitioner realized at least $3,158,000 of unreported income in 1983 from the sale of marijuana. Self-Employment Tax Respondent determined that petitioner is liable for the self-employment tax prescribed by section 1401. Section 1401(a) imposes a tax "on the self-employment income of every individual". Self-employment income is defined generally as "net earnings from self-employment", which in turn is defined as "the gross income derived by an individual

i.e., Social Security taxes, and therefore did not report or pay such taxes for their 1994 tax year. Petitioners do not dispute that Mr. Secretario's income constitutes self-employment income within the meaning of sections 1401 and 1402.2 However, 2Sec. 1401 imposes a tax on "self-employment income" of every individual. Sec. 1402(b) defines "self-employment income" as "net earnings from self-employment". Sec. 1402(a) generally defines "net earnings from self-employment" as gross income derived

s received but not reported in 1991, but contend that this amount should be reported as income of Ruckman, Inc. 4The parties appear to be in agreement that these amounts, if income of Ruckman, Inc., would not be subject to self- employment tax under sec. 1401 when passed through to petitioners. Cf. Ding v. Commissioner, T.C. Memo. 1997-435. - 9 - On brief, respondent argues that the facts of this case demonstrate that the payments from third parties for dispatch services were received by Mrs. Ru

Petitioner did not present any evidence concerning respondent's determination that he is subject to self-employment tax under section 1401 on the $65,000 income from his veterinary practice for each of the years - 9 - in issue.

er in two private letter rulings and Ray v. Commissioner, T.C. Memo. 1996-436. The rulings consider whether CRP payments were includable in the taxpayers' net earnings from self-employment and therefore subject to the self-employment tax imposed by section 1401. The Commissioner's conclusions regarding the nature of the CRP payments, as articulated in the rulings, were dependent upon factual determinations focusing on whether the taxpayers materially participated in the trade or business of farm

OPINION Section 1401 imposes a tax on the self-employment income of every individual. Self-employment income is defined as “net earnings from self-employment”. Sec. 1402(b). The term “net earnings from self-employment” is defined as gross income derived by an individual from a trade or business carried on by such individual less the deductions attributable

The issues are: (1) Whether petitioner is liable for tax on additional wage income in the amount of $170 earned by Debra Schroeder (petitioner's deceased wife); (2) whether certain income earned by petitioner constitutes earnings from self-employment within the meaning of section 1402, subject to tax imposed by section 1401; (3) whether Social Security benefits received by petitioner and Mrs.

OPINION Section 1401 imposes Social Security and medicare taxes (self-employment tax) on income derived by an individual from a 2 Respondent concedes that petitioner is entitled to earned income credits pursuant to sec. 32 for the taxable years 1992 and 1993 in the amounts of $1,184 and $1,429, respectively. - 3 - trade or business (self-employment income

Section 1401 imposes a tax on self-employment income. Section 1402 defines net earnings from self-employment as gross income derived from a trade or business. Petitioner did not appear at trial or present any information or evidence that the commissions received were not self-employment income. The evidence adduced by respondent establishes that th

held by the Bank of Parker from petitioner's wages during 1992. Petitioner did not make 1 Respondent concedes that petitioner did not receive income in 1992 in excess of the amounts stipulated and that she is not liable for self-employment tax under sec. 1401 for that year. 2 Unless otherwise indicated, all section and subtitle references are to the Internal Revenue Code in effect for the years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. 3 The parties'

tted under Rule 91(f) establish that petitioner had income for the years in issue which she failed to report. In addition, petitioner did not present any evidence contesting respondent's determination that she is subject to self-employment tax under section 1401. We sustain respondent's determination as to the deficiencies in petitioner's Federal income and self-employment taxes. Section 6654(a) imposes an addition to tax for failure to make timely estimated income tax payments. Section 6654(e)

Section 1401 imposes a tax on self-employment income. Self- employment income consists of gross income from any trade or business carried on by an individual less allowable deductions attributable to the trade or business. Sec. 1402(a). Respondent's determination that petitioner is liable for self- 22(...continued) capital of Amman"; however, becau

f- pocket payment on the debit balance. Self-Employment Tax Respondent determined that due to the increase in petitioner's nonemployee compensation for the tax years 1988 through 1991, petitioners were liable for increased self- employment tax under section 1401. Petitioner asserts that he did not receive the income in question because the amounts received constituted loan proceeds, and therefore there is no self-employment tax due. Additions to Tax Petitioners neither requested nor received ext

Self-Employment Tax Respondent determined that petitioners are liable for self- employment tax under section 1401 and that they may deduct one- half of the self-employment tax they paid under section 164(f).

Self-Employment Tax Respondent determined that petitioners owe self-employment tax under section 1401 on MPM's income, contending that the video production business was operated as a sole proprietorship, and that the corporate form should be disregarded.

Self-Employment Tax Respondent determined that petitioners are liable for self- employment tax under section 1401 and that they may deduct one- half of the self-employment tax they paid under section 164(f).

Self-Employment Tax Respondent determined that petitioner is liable for self- employment tax of $8,676, section 1401, and that he may deduct self-employment tax of $4,338, section 164(f), for 1992.

Whether petitioner is liable for self-employment taxes under section 1401 for each of the years in question.

He did report self-employment tax under section 1401 based on the net profit disclosed on his Schedule C.4 4 Although petitioner reported "zero" taxable income, his return actually disclosed a loss of $1,400.

Because section 162(a) deductions are not involved, and because the parties agree that the tax imposed by section 1401 (additional tax imposed upon earnings from self-employment) is not applicable, it makes no offered neither evidence nor argument that petitioner has improperly included such costs in the computation of the reported cost of goods sold.

lose petitioners' residence at the time they filed their 2The parties agree that: (1) Petitioner Robert Lolli received, but failed to report, $24,500 of self-employment income during the taxable year 1990 that is subject to self-employment tax under sec. 1401; (2) petitioners did not receive interest income in the amount of $332 during the taxable year 1990; and (3) petitioner Robert Lolli earned, but failed to report, $3,106 of W-2 wages earned during the taxable year 1991. We note that petitio

on in the amount of $5,000 for a deposit he made on a townhouse; (3) whether Mr. Brown is entitled to claim a deduction for a theft loss in the amount of $22,300; and (4) whether Mr. Brown is liable for self- employment taxes under the provisions of section 1401. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by this reference. Mr. Brown resided in Alexandria, Louisiana, at the time the petition

Section 1401 imposes a tax on the "self-employment income" of every individual. "Self-employment income" is defined generally in section 1402(b) as "the net earnings from self-employment derived by an individual * * * during any taxable year". Section 1402(a) defines the term "net earnings from self- employment" as the "gross income derived by an i

s and an adjustment not in dispute, respondent increased petitioners' income by $14,842 and $14,758 for the years 1991 and 1992, respectively.3 3Due to these changes, respondent increased petitioners' liability for the self-employment tax imposed by sec. 1401 and determined that petitioners were ineligible for the earned income credit. These adjustments are not in dispute and will be resolved in accordance with the resolution of the disputed issue. - 11 - Discussion Respondent's reconstruction o

Section 1401 imposes a tax on the "self-employment income" of every individual. "Self-employment income" is defined generally in section 1402(b) as "the net earnings from self-employment derived by an individual * * * during any taxable year". Section 1402(a) defines the term "net earnings from self- employment" as the "gross income derived by an i

Section 1401 imposes a self-employment tax on self-employment income. Section 1402(b) generally defines self-employment income -- 4499 -- as net earnings from self-employment derived by an individual. The term "net earnings from self-employment" means gross income derived by an individual from any trade or business carried on by such individual, l

o a charitable contribution deduction. 3. Self-Employment Tax With regard to his writing activities, petitioner reported self-employment income in 1990 and 1992. Respondent asserts that these amounts are subject to the self-employment tax imposed by section 1401. Petitioner has the burden of proving that respondent erroneously determined liability for the self- employment tax. Snyder v. Commissioner, T.C. Memo. 1995-285. Petitioner has failed to address this issue. As such, we sustain respondent

Self-employment Tax Deduction The amount of the allowable deduction for one-half of the self-employment tax imposed by section 1401 will be recomputed under Rule 155.

Self-Employment Tax Section 1401 imposes a self-employment tax on the self- employment income of every individual.

Section 1401 imposes a tax on self-employment income. Section 1402 defines net earnings from self-employment as gross income derived from a trade or business less certain deductions. Commission income from Kemp was reported on a Schedule C. Petitioner does not seriously dispute that the commission income is not subject to self-employment tax. Respo

iness. To the extent indicated below, respondent has also made concessions with respect to certain deductions claimed on petitioner's Schedule A. Finally, respondent acknowledges that, to the extent petitioner is liable for self-employment tax under sec. 1401, she will be allowed a corresponding deduction under sec. 164(f). - 3 - Some of the facts have been stipulated and are so found. The stipulation of facts and attached exhibits are incorporated herein by this reference. Although petitioner f

Section 1401 Self-Employment Tax Respondent determined that petitioner is liable for self- employment tax on the following amounts of unreported income from Pieces of Eight for the years in issue: Year Amount 1987 $92,446 1988 37,891 1989 58,577 Section 1401 imposes a tax on the self-employment income of every individual. The term “self-employment

s remaining in dispute are: (1) Whether petitioner earned income in the amounts attributed to him in the notice of deficiency for the years 1989 through 1992; (2) if so, whether certain of that income is subject to the self-employment tax imposed by section 1401; (3) whether petitioner is liable for the addition to tax under section 6651(a) for each year due to his failure to file a Federal income tax return; and (4) whether petitioner is liable for the addition to tax under section 6654 for eac

Section 1401 imposes a tax on the self-employment income of individuals. Sec. 1401(a). The term "net earnings from self- employment" is defined by section 1402(a), in relevant part, as 6 the gross income derived by an individual from any trade or business carried on by such individual, less any allowable deductions attributable to such trade or bu

Self-Employment Tax Section 1401 imposes a tax on the “self-employment income” of every individual.

The issues for decision are: (1) Whether petitioners are entitled to trade or business expense deductions for payments to religious organizations made during the years 1990 and 1991; and (2) whether the self-employment tax imposed by section 1401 is applicable to the earnings from Dean W.

unts withheld from his taxes insofar as his ultimate tax liability is concerned. However, the determination of a statutory deficiency does not take such amounts into account. See sec. 6211(b)(1). 2In computing the amount of self-employment tax under sec. 1401, respondent reduced the amount of income received from Primerica Life Insurance Co. by 7.65%. Such reduction is required by sec. 1402(a)(12). In computing the amount of regular income tax under sec. 1, respondent allowed as a deduction from

Because section 162(a) deductions are not involved, and because the parties agree that the tax imposed by section 1401 (additional tax imposed upon earnings from self-employment) is not applicable, it makes no difference in this case whether petitioner reports the income from the program as an independent contractor or as an employee of Howard County.

Self-Employment Taxes Section 1401 imposes a tax on an individual's self- employment income, which is based on the "net earnings from self- employment" derived by the individual during the taxable year.

itled to deduct her realized loss under section 165(c). Therefore, we sustain respondent's determination as to this issue. Issue 5. Self-Employment Tax Respondent determined that petitioner had additional self- employment income subject to tax under section 1401. - 23 - Section 1401 imposes taxes on the self-employment income of every individual. Section 1402(b) defines self-employment income as the net earnings from self-employment derived by an individual. Section 1402(a) defines an individual

$21,828 1988 32,277 1$1,530 1989 56,581 1990 37,609 2375 3$61 1991 50,669 1992 78,645 1 paid by Swimmin' Time, Inc. 2 paid by Dennis G. Hann 3 paid by Arizona Central Credit Union The deficiencies in income taxes include self-employment taxes under section 1401. The additions to tax under section 6651(a)(1) are based on respondent's determination that petitioner's failure to file income tax returns for the years in issue was not due to reasonable cause. The additions to tax under section 6653(a)

Section 1401 imposes taxes on the self-employment income of every individual. Section 1402(b) defines self-employment income as the net earnings from self-employment derived by an individual. Section 1402(a) defines an individual's net earnings from self-employment as the gross income derived by an individual from any trade or business carried on b

Respondent's deficiency - 4 - determinations for both 1991 and 1992 include adjustments for self-employment tax under section 1401 and tax on premature distributions from individual retirement accounts under section 72(t).

Self-Employment Taxes Section 1401 imposes a tax on an individual's self- employment income, which is based on the "net earnings from self- employment" derived by the individual during the taxable year.

Section 1401 imposes a tax on self-employment income of individuals. Respondent properly determined that petitioners are liable for self-employment tax on their respective business incomes in 1990 and 1991. Section 164(f) provides a deduction to an individual of an amount equal to one-half of the taxes imposed by section 1401 for the taxable year.

Self-Employment Taxes Respondent determined that petitioners are liable for self- employment taxes under section 1401 for 1987, 1988, and 1989.