- 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's net earnings from self-employment as the gross income derived by an individual from any trade or business carried on by such individual, reduced by income tax deductions attributable to the trade or business. Petitioner bears the burden of proving that she is not liable for additional taxes imposed by section 1401. Rule 142(a). Petitioner does not dispute that she had additional self- employment income during the year at issue. Therefore, we affirm respondent's determination. Issue 6. Negligence Respondent determined that petitioner was liable for the additions to tax for negligence under section 6653(a)(1) and (2). Section 6653(a)(1) provides for an addition to tax of 5 percent of the underpayment if any part of the underpayment is due to negligence or intentional disregard of rules or regulations. Section 6653(a)(2) provides for an addition to tax of 50 percent of the interest payable under section 6601 with respect to the portion of the underpayment which is attributable to negligence or intentional disregard of rules or regulations. Negligence under section 6653(a) is a "'lack of due care or failure to do what a reasonable and ordinarily prudent person would do under the circumstances.'" Neely v. Commissioner, 85Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
Last modified: May 25, 2011