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After concessions,1 the issues for decision are: (1)
Whether petitioners’ horse training and breeding activity was an
activity not engaged in for profit; (2) whether petitioners are
liable for self-employment tax; (3) whether petitioners are
liable for an accuracy-related penalty pursuant to section
6662(a);2 and (4) whether petitioners are liable for an addition
to tax for failure to file a timely return.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioners resided in
Sturgeon Lake, Minnesota, at the time they filed their petition.
Chiropractic Practice
Brad Montagne (petitioner) has been a chiropractor for 14
years. He operated his chiropractic practice as a sole
proprietorship in 1997 and 1998. Petitioner typically works as a
chiropractor 5 days a week for 40 hours.
1 Petitioners conceded every issue raised in the statutory
notice of deficiency, except the addition to tax and penalty and
whether petitioners are subject to self-employment tax.
Accordingly, petitioners conceded that they had additional
interest income of $2,056 and $1,861 in 1997 and 1998,
respectively. Petitioners also conceded that they had additional
“net schedule C income” of $61,960 and $65,719 in 1997 and 1998,
respectively.
2 Unless otherwise stated, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure.
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Last modified: May 25, 2011