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will be liable for self-employment tax, which shall be determined
under Rule 155.
For taxable year 1994, respondent determined that petitioner
had interest income of $10, which petitioner does not contest,
nonemployee compensation of $2,959, which respondent concedes,
and Schedule C self-employment income of $4,050, allegedly fees
resulting from the preparation of 25 tax returns, 24 at $150 each
and 1 at $450. We conclude that petitioner had 15 clients for
whom he prepared income tax returns, 14 at $200 apiece (totaling
$2,800) and 1 at $450, resulting in unreported Schedule C self-
employment income of $3,250. Again, petitioner has not
substantiated that he had incurred business expenses in deriving
his Schedule C income, and we shall not allow any such expenses.
While petitioner does not have taxable income for 1994, he has
self-employment income upon which self-employment tax is owed,
which shall be computed under Rule 155.
Lastly, we consider respondent’s determination that
petitioner was liable for additions to tax under section
6651(a)(1) for the years 1989 through 1994. In view of our
holding that petitioner had no taxable income for the years 1989
through 1992, it follows that there is no underpayment to which a
section 6651(a)(1) addition to tax would be applicable.
Accordingly, respondent is not sustained on this issue for those
years.
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