Taylor Miller - Page 39




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          Income Tax Undermines Civil Rights Law”, Tax Notes 1643                     
          (Sept. 25, 2000).                                                           
               Unfortunately for petitioner, the governing statutory                  
          language does not allow us to disregard its plain meaning.  The             
          problem with petitioner’s arguments and authorities is that they            
          derive no support from and indeed are contradicted by the                   
          statutory and regulatory language as construed by the Tax Court.            
               Section 1.401-10(c)(1), Income Tax Regs., interprets “earned           
          income,” as used in section 401(c)(2)(A), quoted supra p. 35, and           
          section 1402(a).  The regulation provides that an individual who            
          renders no personal services has no “earned income” even though             
          such an individual may have net earnings from self-employment               
          from a trade or business.  Earned income includes professional              
          fees and other amounts received as compensation for personal                
          services “actually rendered” by the individual.  Id.                        
          Accordingly, if a self-employed taxpayer has not rendered                   
          personal services in the trade or business for which a plan is              
          established, then the taxpayer has no earned income and is not              
          entitled to deduct contributions to the plan.  See S. Rept. 992,            
          87th Cong., 1st Sess. 12 (1961), 1962-3 C.B. 303, 314 (“the                 
          measuring rod for deductible contributions for self-employed                
          * * * [taxpayers] is ‘earned income’ * * *.  This means that                
          contributions by or for a proprietor or partner may be made under           







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