- 5 -
also secs. 1.1401-1(a), 1.6017-1(a)(1), Income Tax Regs. Subject
to statutory exclusions, the amount of self-employment tax an
individual owes is based on his “net earnings from self-
employment”. Sec. 1402(a). “Net earnings from self-employment”
include “the gross income derived by an individual from any trade
or business carried on by such individual, less the deductions
allowed” which are attributable to the trade or business. Id.;
sec. 1.1402(a)-1(a)(1), Income Tax Regs.
Petitioner conceded that he operated Imperial as a sole
proprietorship and that Imperial had no employees. Petitioner
failed to offer any evidence to contradict respondent’s position
that petitioner personally managed and controlled Imperial’s
telephone services business. Relying on invoices issued by
Imperial and bank deposits made by petitioner, respondent
appropriately reconstructed petitioner’s income for 1993, 1994,
1995, 1996, 1997, and 1998. See, e.g., Holland v. United States,
348 U.S. 121, 133 (1954); Bevan v. Commissioner, 472 F.2d 1381
(6th Cir. 1973), affg. T.C. Memo. 1972-312; Woods v.
Commissioner, T.C. Memo. 1989-611, affd. without published
opinion 929 F.2d 702 (6th Cir. 1991). Petitioner did not
challenge respondent’s computations but rather admitted that he
was directly remunerated by Imperial’s clientele for services he
provided through Imperial. Applying the law to these facts, we
conclude that petitioner was indeed self-employed and liable for
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011