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Section 1401 provides that a tax shall be imposed, in
addition to other taxes, on the self-employment income of every
individual. Self-employment income generally includes an
individual’s net earnings from self-employment in any trade or
business, a partner’s distributive share of income or loss from
any trade or business carried on by a partnership of which he is
a member, and guaranteed payments from such a partnership. Sec.
1402; sec. 1.1402(a)-1, Income Tax Regs. Section 1402(a)(2)
specifically excludes interest from the term “net earnings from
self-employment.” Petitioner bears the burden of proving that he
is not liable for the self-employment tax. See Rule 142(a).
Petitioner argues that he acted as a mere conduit in
collecting funds distributed by the partnerships and that in his
role as guardian, he simply transferred the funds to his minor
children. Petitioner asserts that he did not have property
rights in the funds distributed by the partnerships.
The Federal income tax returns filed on behalf of both
partnerships report petitioner’s entitlement to a percentage of
the profits and losses and guaranteed payments from each
partnership. Petitioner has not demonstrated that by virtue of
his guardianship role, his rights in the funds distributed by
these partnerships were restricted, and he has submitted no
evidence that he distributed the money to his minor children.
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