Mahendra K. Tandon - Page 23

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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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