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trade or business carried on by such individual, less the
deductions allowed * * * which are attributable to such trade or
business". Sec. 1402(a) and (b). Other than under circumstances
not present in this case, services performed by an individual as
an employee do not constitute a trade or business for self-
employment tax purposes. Sec. 1402(c)(2).
According to respondent, the compensation that petitioner
received from AAA during 1997 constitutes self-employment income
subject to tax under section 1401. Petitioners, having failed to
report any such income on their 1997 return, did not report any
section 1401 tax on that return. They now claim that petitioner
performed services for AAA during 1997 as an employee rather than
an independent contractor.
The question of whether an individual performs services for
another as an employee or independent contractor is generally
considered a question of fact. Packard v. Commissioner, 63 T.C.
621, 629 (1975). In resolving such questions, this and other
Federal courts apply what is commonly referred to as the common
law test embodied in sections 31.3121(d)-1(c)(2) and 31.3401(c)-
1(b), Employment Tax Regs. Matthews v. Commissioner, 907 F.2d
1173, 1178 (D.C. Cir. 1990), affg. 92 T.C. 351 (1989); Packard v.
Commissioner, supra. An employee is defined as “any individual
who, under the usual common law rules applicable in determining
the employer-employee relationship, has the status of an
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