- 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 forPage: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011