Lance A. Landers - Page 4

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          was associated with the law firm of Weiner & Millo (firm) prior             
          to 1998.  At the firm, petitioner had a colleague, Jonathan                 
          Tolpin (Mr. Tolpin), another attorney.  Petitioner left the firm            
          in late 1995.  Mr. Tolpin left the firm in 1997.                            
               In 1997, petitioner referred two clients to Mr. Tolpin.  The           
          property damage client contacted petitioner during his time at              
          the firm.  Petitioner referred the personal injury client to Mr.            
          Tolpin while petitioner was in the process of closing                       
          petitioner’s law practice.                                                  
               Petitioner received $8,108 from Mr. Tolpin.  This                      
          represented petitioner’s portion of the fee from the November               
          1998 settlement of the property damage client’s claim.                      
          Petitioner also received $27,681.33 from Mr. Tolpin.  This                  
          represented petitioner’s portion of the fee in the December 1998            
          settlement of the personal injury client’s claim.  During 1998,             
          petitioner received a total of $35,789 (rounded) from Mr. Tolpin.           
          Mr. Tolpin reported the $35,789 he paid to petitioner as                    
          nonemployee compensation on Form 1099-MISC, Miscellaneous Income.           
               Petitioner contended that the $35,789 “was not paid for                
          services performed, but for transfer of goodwill [which]                    
          qualifies for capital gains treatment”.                                     
               Section 1401(a) imposes a self-employment tax on the self-             
          employment income of every individual for each taxable year.                
          Section 1402(b), in relevant part, defines self-employment income           






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