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On March 17, 1995, respondent sent, via certified mail, a
statutory notice of deficiency to petitioners setting forth
deficiencies in petitioners' Federal income tax for the taxable
years 1989, 1990, and 1991. Respondent contends that
petitioner's extended earnings are subject to the self-employment
tax under sections 1401 and 1402, because the extended earnings
paid to petitioner were derived from petitioner's prior insurance
business. Petitioners contend that the extended earnings are the
proceeds from the sale of petitioner's insurance agency to the
Companies and are, therefore, proceeds from the disposition of a
capital asset. In the alternative, petitioners argue that the
extended earnings are not sufficiently related to petitioner's
past insurance business in order to make the payments subject to
self-employment tax under sections 1401 and 1402.
Respondent contends that the "extended earnings" paid to
petitioner by the Companies constitute self-employment income for
purposes of the self-employment tax under sections 1401 and 1402,
because the payments were derived from a trade or business
carried on by petitioner. Petitioners have the burden of proving
respondent's determination is incorrect. Rule 142(a); Welch v.
Helvering, 290 U.S. 111 (1933). Petitioner argues that his
relinquishment to the Companies of the records and lists he
maintained with respect to the policies he sold and the policy-
holders to whom he provided service was tantamount to the sale of
business "goodwill" to the Companies. Thus, petitioners argue
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