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In 1995, Petitioner earned $32,834.85 from the City of Fort
Worth, $12,860 from the housing authority, and $2,198 from the
school district. Petitioner included the $12,860 from the
housing authority as part of what he reported as wages on his
1995 return. He failed to report on his return the $2,198
received from the school district. At trial, petitioner conceded
that the $2,198 received from the school district should have
been included in his reportable income. Petitioner did not
report any amount of self-employment tax on his off-duty income.
Petitioner contends that he was an employee of the City of
Fort Worth when he worked off-duty jobs because he was under the
control of the Department at all times. Petitioner argues that
because he was employed by the City of Fort Worth in its Police
Department for the off-duty jobs, and not self-employed, he does
not have to pay self-employment taxes on the off-duty income.
Respondent asserts that petitioner was not under the control of
the Department at the time petitioner worked off-duty jobs.
Therefore, respondent's position is that petitioner was not an
employee, and as such, his compensation from off-duty employment
is subject to self-employment tax under section 1401.
OPINION
Section 1401 imposes a tax upon a taxpayer's self-employment
income. Self-employment income includes the net earnings from
self-employment derived by an individual during the taxable year.
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