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her conclusion that such compensation constitutes earnings from
self-employment within the meaning of section 1402.
OPINION
In addition to other taxes, section 1401 imposes a tax upon
an individual's self-employment income. This tax is commonly
referred to as the self-employment tax. Ignoring exceptions not
applicable to this case, section 1402(b) defines self-employment
income as net earnings from self-employment. Disregarding
irrelevant exceptions and inclusions, net earnings from self-
employment consist of the gross income derived by an individual
from any trade or business carried on by such individual, less
the allowable deductions that are attributable to such trade or
business. Sec. 1402(a). However, the self-employment tax
generally does not apply to compensation paid to an employee by
an employer. Sec. 1402(c)(2) and (3).
Petitioners contend that petitioner provided police-type
services to the companies as an employee of the Department, not
as an independent contractor.4 Consequently, according to
petitioners, the compensation that petitioner received from the
companies is not subject to the self-employment tax.
Respondent's determination to the contrary, having been made in a
notice of deficiency, is presumptively correct, and petitioners
4Petitioners have expressly taken the position that
petitioner was not an employee of any of the companies during the
year in issue. Respondent apparently agrees, and we do not
consider this point in our opinion.
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