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earned some income from his or her own efforts should not be hit
so hard by the new anti-abuse rule.
We note that respondent does not suggest that petitioner
divided a unitary activity into an employment and a self-
employment in order to “game the system”. We note that
respondent does not suggest that any part of petitioner’s $4,275
W-2, Wage and Tax Statement, income was really a gift, or for any
other reason was not properly part of petitioner’s “earned
income” under section 63(c)(5)(B). Instead, it appears that in
1999 petitioner had two income-earning activities, one of which
did not produce a profit that year. In the absence of any
indication of impropriety on the part of petitioner or her
parents, we conclude that we are not required to interpret the
term earned income as though (1) the Congress had not intended to
change the law when it changed the statutory language or (2) the
Congress had intended to change the law to the section 32 model
even though the Congress did not use the section 32 language or
even indicate in the legislative history that section 32 was to
be the model for section 63. Under the circumstances, we
conclude that the Congress’s purposes are better served by
agreeing with petitioner’s conclusion in the setting of the
instant case.
We hold that petitioner’s self-employment loss does not
reduce her earned income for purposes of section 63 and on the
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