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Prior to trial, respondent prepared and stipulated the
following revised computations of petitioner’s net earnings from
self-employment as well as the income tax deficiencies and
additions to tax allegedly owed by petitioner for all years at
issue:3
Revised net Revised Additions to
earnings from Revised self- deficiencies tax (revised)
Year self-employment employment tax (incl. SE tax) Sec.6651Sec. 6654
1990 $11,642 $1,645 $2,474 $619 $163
1991 32,336 4,569 8,791 2,198 506
1992 23,705 3,349 5,768 1,442 252
1993 19,723 2,787 4,628 1,157 194
1994 2,063 291 291 100 0
1995 38,530 5,444 10,648 2,662 581
1996 0 0 13 13 0
1997 43,682 6,172 12,509 3,127 674
OPINION
Self-Employment Tax
The first Social Security Act, ch. 531, 49 Stat. 620 (1935),
was enacted as part of a program to provide retirement benefits
to qualifying individuals who no longer were employed. Today,
such benefits are funded primarily from taxes paid by employers,
employees, and self-employed individuals under the Federal
Insurance Contributions Act (FICA), ch. 736, 68A Stat. 415
(1954), and the Self-Employment Contributions Act of 1954 (SECA),
ch. 736, 68A Stat. 353. See secs. 3101-3128, 1401-1403.
3Respondent stipulated that petitioner had Schedule C,
Profit or Loss From Business, income of $20,250, Schedule C
expenses of $20,050, and no liability for self-employment tax for
1996.
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