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 PPage: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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