- 3 -
Without detailing the source of income or the amount of time
he spent on each activity, petitioner explained that during the
years in issue he earned income from street hustling, pimping,
panhandling, and gambling. We group these activities as "street-
hustling".
Section 1401 imposes a tax on a taxpayer's self-employment
income. Self-employment income includes the net earnings from
self-employment derived by an individual during the taxable year.
Sec. 1402(b). Net earnings from self-employment means gross
income derived by an individual from any trade or business
carried on by such individual, less allowable deductions
attributable to such trade or business, plus certain items not
relevant here. Sec. 1402(a). The term trade or business for
purposes of the self-employment tax generally has the same
meaning it has for purposes of section 162. Sec. 1402(c).
To be engaged in a trade or business within the meaning of
section 1402(a), an individual must be involved in an activity
with continuity and regularity, and the primary purpose for
engaging in the activity must be for income or profit.
Commissioner v. Groetzinger, 480 U.S. 23, 35 (1987). A sporadic
activity, a hobby, or an amusement diversion does not qualify.
Commissioner v. Groetzinger, supra at 35. Whether an individual
is carrying on a trade or business requires an examination of the
facts involved in each case. Higgins v. Commissioner, 312 U.S.
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011