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unreported income from his medical practice plus the disallowed
Schedules C deductions. Petitioner argues that he paid the
maximum amount of Social Security tax, and no amount is due.
Section 1401 imposes self-employment tax on self-employment
income. Section 1402 defines net earnings from self-employment
as the gross income derived by an individual from the carrying on
of any trade or business by such individual less allowable
deductions attributable to such trade or business.
We agree with respondent. We conclude that petitioner is
liable for additional self-employment tax in 1986 and 1987 in
accordance with section 1401 based upon petitioner's additional
self-employment income from his unreported income from his
medical practice plus the disallowed deductions.
Addition to Tax for Fraud
The addition to tax in the case of fraud is a civil sanction
provided primarily as a safeguard for the protection of the
revenue and to reimburse the Government for the heavy expense of
investigation and the loss resulting from a taxpayer's fraud.
Helvering v. Mitchell, 303 U.S. 391, 401 (1938). Fraud is
intentional wrongdoing on the part of the taxpayer with the
specific purpose to evade a tax believed to be owing. McGee v.
Commissioner, 61 T.C. 249, 256 (1973), affd. 519 F.2d 1121 (5th
Cir. 1975).
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