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which are attributable to such trade or business". It is well
established that the earnings of an insurance agent who is an
independent contractor are "self-employment income" subject to
self-employment tax. Simpson v. Commissioner, 64 T.C. 974
(1975).
In Newberry v. Commissioner, 76 T.C. 441, 444 (1981), this
Court held that, for income to be taxable as self-employment
income, "there must be a nexus between the income received and a
trade or business that is, or was, actually carried on." Under
our interpretation of the "nexus" standard, any income must arise
from some actual (whether present, past, or future) income-
producing activity of the taxpayer before such income becomes
subject to self-employment tax. Id. at 446. And section
1.1402(a)-1(c), Income Tax Regs., provides that gross income
derived from an individual's trade or business may be subject to
self-employment tax even when it is attributable in whole or in
part to services rendered in a prior taxable year.
First, we must decide whether the residual premiums received
by Mr. Lencke in 1990 and 1991 from Farm Bureau are subject to
self-employment tax. Respondent contends that section 1401
imposes self-employment tax upon this type of income. We agree.
Petitioners have the burden of proving that the residual premiums
received by them are not subject to self-employment tax. Because
they have chosen not to pursue this issue in either their opening
brief or reply brief, we consider it to have been conceded.
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