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Issue 6. Self-Employment Tax
Alice Berger asserts that she is not liable for any self-
employment tax because she never owned or had a share in the
ownership of the Woodbine business, as opposed to the land, and
did not participate in the day-to-day operations or management of
the business. Howard Berger similarly argues that during 1988
and 1989 neither he nor Alice Berger participated in the
operation of the cemetery business, so that no self-employment
tax should be imposed on the Woodbine income of either of them.
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 individual from
any trade or business carried on by such individual, less the
deductions allowed by this subtitle which are attributable to
such trade or business". Section 1.1402(a)-2(b), Income Tax
Regs., provides that "The trade or business must be carried on by
the individual, either personally or through agents or
employees." These provisions are to be broadly construed to
favor treatment of income as earnings from self-employment.
Hornaday v. Commissioner, 81 T.C. 830, 834 (1983).
Petitioners do not deny that Woodbine was a trade or
business under the principles laid down by Commissioner v.
Groetzinger, 480 U.S. 23 (1987). It doesn't matter whether Alice
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