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business. Sec. 1402(a).
Respondent contends that petitioner is liable for the self-
employment tax because the $24,000 was commission income in
petitioner’s trade or business as a salesperson. We disagree.
For purposes of section 1401, “trade or business” shares the
same definition as when used in section 162. Sec. 1402(c).
However, an exception exists where the performance of service is
by an individual as an employee. Sec. 1402(c)(2). Section
1.1402(c)-3, Income Tax Regs., states as follows:
the performance of service by an individual as an
employee, as defined in the Federal Insurance
Contributions Act (chapter 21 of the Internal Revenue
Code) does not constitute a trade or business within
the meaning of section 1402(c) and section 1.1402(c)-1.
* * *
Petitioner was a full-time, salaried employee of QSN during the
year in issue. He did not engage in a trade or business subject
to the self-employment tax during the year in issue.
Accordingly, petitioner is not subject to self-employment
tax. Petitioner is sustained on this issue.
Section 6662(a)
The last issue for decision is whether petitioner is liable
for an accuracy-related penalty pursuant to section 6662(a) for
the year in issue. Section 6662(a) imposes a penalty of 20
percent of the portion of the underpayment which is attributable
to negligence or disregard of rules or regulations. Sec.
6662(b)(1). Negligence is the “‘lack of due care or failure to
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