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self-employment tax for 1994 and issued to petitioners a
statutory notice of deficiency. Petitioners filed a protest with
the Internal Revenue Service (IRS) Office of Appeals.
Petitioners argued that petitioner was not self-employed but was
an employee of the vessel owner or employer. Petitioners argued
also that petitioner is not liable for Federal Insurance
Contributions Act (FICA) taxes on employees that were not
withheld and paid over by his employer.
According to petitioners, the Office of Appeals (Appeals)
accepted petitioners' argument that petitioner was an employee
for the year and rescinded the notice of deficiency on August 20,
1996. Appeals, however, did not accept petitioners' contention
that petitioner is not liable for FICA taxes for 1994. Appeals
informed petitioners in a letter dated January 15, 1998, that the
IRS intended to assess FICA taxes of $4,806 ($3,757 of employee
Social Security tax and $1,049 of medicare tax)1 under section
3101(a) and (b) for 1994. Petitioners argue, nevertheless, that
the Court has jurisdiction over the 1994 tax year because
respondent has made an income tax deficiency and not an
employment tax assessment against them for the year.
As shown on Form 4340, Certificate of Assessments and
1The product of the maximum wages subject to Social Security
tax, $60,600, times the 6.2 percent tax rate, plus the product of
the amount shown on the return as "Net profit per Fisherman
Schedule C", $72,357, times the 1.45 percent medicare tax rate.
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