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by section 1402. Furthermore, royalty payments received as self-
employment income from a trade or business are subject to self-
employment tax. Dacey v. Commissioner, T.C. Memo. 1992-187;
Hittleman v. Commissioner, T.C. Memo. 1990-325, affd. without
published opinion 945 F.2d 409 (9th Cir. 1991); Langford v.
Commissioner, T.C. Memo. 1988-300, affd. without published
opinion 881 F.2d 1076 (6th Cir. 1989).
We have found that petitioner is in the trade or business of
selling the companies' products and recruiting distributors, and
that the payments that petitioner received from the companies for
sales made by his down-line distributors, regardless of whether
he had personal contact with them, are gross receipts from his
trade or business. Therefore, all such income is self-employment
income to petitioner which is subject to self-employment tax
under section 1401.
For the foregoing reasons,
Decision will be entered
under Rule 155.
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