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eligible to receive CRP payments with respect to certain
property.7
Nor do we agree, as petitioners suggest, that Ray v.
Commissioner, supra, supports a finding that respondent’s
position was not substantially justified in law. As in the
private letter rulings, the issue in Ray was whether CRP payments
were includible in the taxpayer's net earnings from self-
employment and therefore subject to the self-employment tax
imposed by section 1401. To be income subject to the self-
employment tax, we stated that "the income in question must
derive from a trade or business carried on by an individual, and
that there must be a nexus between such trade or business and the
income that the individual has received." In Ray, however, the
parties stipulated that the taxpayer was “engaged in the active
trade or business of farming and/or cattle grazing”. Thus, the
7In Rev. Rul. 60-32, 1960-1 C.B. 23, respondent took the
position that payments attributable to the acreage reserve
program described in the Soil Bank Act, title I of the
Agricultural Act of 1956, ch. 327, 70 Stat. 188 (formerly 7
U.S.C. 1801), constitute net earnings from self-employment to the
recipient unless the recipient does not operate, or materially
participate in the operation of, a farm. But see Wuebker v.
Commissioner, 110 T.C. ___ (1998)(rejecting the reasoning of the
revenue ruling and holding that CRP payments, as rental payments,
are not subject to the self-employment tax imposed by sec. 1401).
Neither party made reference to this revenue ruling in connection
with the motion here under consideration. Because the revenue
ruling contemplates an examination of facts and circumstances, we
do not consider respondent's position in this proceeding to be
contrary to the position stated in the revenue ruling.
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