- 42 -
Echazabal, supra at 81; United States v. City of New York, supra
at 98.
3. Application of Section 3121(b)(20) in Light of Our
Interpretation of the Statute and the Regulation
We hold petitioner was self-employed under section
3121(b)(20) when he worked as a captain or crew member of the
fishing boats in 1997.
Petitioner was self-employed in his capacity as a crew
member because as a crew member he received a share of 50 percent
of the proceeds from the catch. Petitioner was self-employed in
his capacity as captain because he received a crew member’s share
and a percentage of the 50-percent of proceeds allocated to the
boat owner and captain.
Even though petitioner was self-employed in 1997,
petitioners failed to report or pay self-employment tax for
petitioner’s fishing activities as required by section 1401.
In the statutory notice, respondent correctly reclassified
$2,031 (40 percent of $5,077) of petitioners’ claimed health
insurance premiums as business expenses reportable on Schedule C,
see sec. 162(l), and all $4,438 of petitioners’ unreimbursed
employee business expenses as business expenses reportable on
Schedule C, see sec. 162(a).
We hold petitioners are liable under section 1401 for the
self-employment tax liability in the amount determined by
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