James E. Anderson and Cheryl J. Latos - Page 2

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               received for working as a crew member or captain on                    
               small fishing boats during 1997.  R determined Ps are                  
               liable under sec. 1401, I.R.C., for self-employment tax                
               with respect to Ps’ 1997 tax year on the ground that P                 
               was a self-employed fishing boat worker during 1997.                   
                    Ps argue P was an employee under sec. 3121(b)(20),                
               I.R.C., on the ground that his share of proceeds of the                
               catches of fish did not depend solely on the amount of                 
               the catch because operating expenses were subtracted in                
               computing his share.                                                   
                    Held:  P was self-employed under sec. 3121(b)(20),                
               I.R.C., because proceeds from the sale of the catches                  
               of fish after subtraction of operating expenses depend                 
               on the amount of each catch.  We interpret the “depends                
               solely” provision of sec. 31.3121(b)(20)-1, Employment                 
               Tax Regs., as excluding only additional fixed payments                 
               to crew members, and P did not receive any such                        

               James E. Anderson and Cheryl J. Latos, pro sese.                       
               John Aletta, for respondent.                                           


               BEGHE, Judge:  Respondent determined petitioners are liable            
          under section 1401 for self-employment tax of $5,764 with respect           
          to their 1997 tax year.1                                                    
               The issue for decision is whether, during 1997, James                  
          Anderson (petitioner) was a self-employed worker on fishing boats           
          under section 3121(b)(20), making petitioners liable for self-              

               1Unless otherwise specified, all section references are to             
          the Internal Revenue Code in effect for the year at issue.                  

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