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Section 1401 imposes a tax on the self-employment income of
every individual for old age, survivors, disability insurance,
and hospital insurance. See sec. 1401(a) and (b); Beachy v.
Commissioner, T.C. Memo. 2000-125; Greene v. Commissioner, T.C.
Memo. 2000-26; sec. 1.1401-1(a), Income Tax Regs. Self-
employment income “means the net earnings from self-employment
derived by an individual”. Sec. 1402(b). Net earnings from
self-employment “means the gross income derived by an individual
from any trade or business carried on by such individual, less
the deductions allowed by this subtitle which are attributable to
such trade or business”. Sec. 1402(a); see also sec. 1.1402(a)-
1, Income Tax Regs. Self-employment tax is assessed and
collected as part of the income tax, must be included in
computing any income tax deficiency or overpayment for the
applicable tax period, and must be taken into account for
estimated tax purposes. See sec. 1.1401-1(a), Income Tax Regs.
Petitioner does not dispute that he received self-employment
income as determined by respondent. Petitioner disputes only
whether he is required to pay self-employment tax. Petitioner
contends that since self-employment tax is merely a
“contribution”, he may choose whether or not to pay it.
According to petitioner, a contribution is a voluntary payment.
Petitioner bears the burden of proving that respondent’s
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Last modified: May 25, 2011