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Discussion5
Gross income includes income from whatever source derived,
including compensation for services and interest. Sec. 61(a)(1),
(4). The parties stipulated that petitioner received
compensation for services of $38,000, $19,007, $22,412, and
$23,295 in the taxable years 1996, 1997, 1998, and 1999,
respectively. The parties further stipulated that petitioner
received interest of $11, $8, $9, and $8 in the taxable years
1996, 1997, 1998, and 1999, respectively. Accordingly,
petitioner must include these amounts in his gross income for the
years in issue.
Section 1401 imposes a tax on the “self-employment income”
of every individual. Section 1402(b) defines “self-employment
income” as “net earnings from self-employment”. Section 1402(a)
generally defines “net earnings from self-employment” as gross
income derived by an individual, less deductions allowed. It is
well established that earnings derived from work as an
independent contractor are “self-employment income” subject to
the self-employment tax. E.g., Jackson v. Commissioner, 108 T.C.
130, 133-134 (1997); Simpson v. Commissioner, 64 T.C. 974 (1975).
5Our resolution of the issues related to petitioner’s income
and self-employment tax liabilities for the years in issue does
not depend on who has the burden of proof in this case. With
respect to the burden of proof for the sec. 6651(a)(1) addition
to tax, see infra note 9 and the accompanying text.
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