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Petitioners had filed their petition in this case with respect to
respondent’s intent to collect their 1994, 1995, 1996, and 1997
tax liabilities, and respondent moved to dismiss the 1994 year
for lack of our jurisdiction.
Regarding the 1994 year, respondent’s motion to dismiss was
granted. Because the notice of deficiency for 1994, which
contained the determination of a deficiency in self-employment
tax, had been rescinded, there was no outstanding determination
of a self-employment tax. After the 1994 notice was rescinded,
petitioners contended that Mr. Anderson was an employee. The
Appeals officer agreed and notified petitioners that due to Mr.
Anderson’s employee status, employment tax would be assessed
against them. It was held that petitioners’ 1994 tax liability
concerned assessed employment tax over which this Court did not
have jurisdiction.
Clearly the 1995 year is distinguishable because respondent
issued a second notice of deficiency determining a self-
employment tax deficiency. The existence of the second notice of
deficiency for 1995, upon which the assessment was based due to
petitioners’ failure to file a petition, roots the subject
matter, for purposes of jurisdiction, in self-employment tax.
The subsequent agreement or settlement to reduce or
recharacterize the outstanding tax liability, although it may be
binding on the parties, does not change the character of
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