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claimed a Schedule C deduction of $157.50 for 2 months of these
maintenance fees but alleged that he paid this fee every month in
1996. We held the record open for 45 days to allow petitioner to
provide documentation to substantiate any additional expense.
Petitioner provided two credit card statements that show he paid
a total of $157.50 to Strategic. Petitioner also provided a
packing list which shows that Strategic sent a product to
petitioner in November 1996 in connection with the “Automatic
Monthly Reorder” petitioner authorized. Petitioner did not
provide any further documentation.
Section 1401 imposes a tax on a taxpayer’s self-employment
income. Self-employment income includes the net earnings from
self-employment derived by an individual during the taxable year.
See sec. 1402(b). Net earnings from self-employment income means
gross income derived by an individual from any trade or business
carried on by the individual, less any attributable deductions.
See sec. 1402(a). An individual is engaged in a trade or
business if the individual’s activities are conducted with
continuity and regularity and primarily for income or profit.
See sec. 1402(c); Commissioner v. Groetzinger, 480 U.S. 23, 35
(1987). The trade or business may be carried on by an individual
“either personally or through agents or employees.” Sec.
1.1402(a)-2(b), Income Tax Regs.
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Last modified: May 25, 2011