123 T.C. No. 12
UNITED STATES TAX COURT
JAMES E. ANDERSON AND CHERYL J. LATOS, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 7425-02. Filed August 19, 2004.
Sec. 3121(b)(20), I.R.C., classifies as self-
employed those crew members of a fishing boat, with a
crew of fewer than 10, who are compensated with a share
of the boat’s catch of fish or a share of the proceeds
from the sale of the catch if the amounts of their
shares depend on the amount of the catch. Sec.
31.3121(b)(20)-1(a), Employment Tax Regs., provides
that if a crew member’s share “depends solely on the
amount of the boat’s * * * catch of fish” (emphasis
added), it qualifies as income from self-employment.
During 1997, P worked as a crew member or captain
on fishing boats with crews of fewer than five members.
The fishing boat owners’ expenses for fuel, ice, and
lubricating oil were subtracted from the proceeds of
sale of the catches of fish to determine P’s
compensatory share of the proceeds of each voyage.
On their 1997 joint Federal income tax return, Ps
failed to report self-employment tax on compensation P
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