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Petitioners’ classification of all funds from the
corporation for use of the new facilities in 1995 as
rent, and none as wages, demonstrates that there were
not independent arrangements with respect to real
estate rentals and compensation for services. More-
over, the transaction does not pass muster given the
strict scrutiny apple [sic] to such related-party
transactions, and given that exceptions from self-
employment tax under � 1402(a)(1) are narrowly con-
strued.
Bot I, Hennen I, and McNamara I involved taxpayers who,
pursuant to certain agreements or arrangements, were to, and did,
participate materially in the production of agricultural commodi-
ties involved in those respective cases. In Bot I and Hennen I,
the taxpayer-owners of the farmland in question entered into
(1) employment agreements or arrangements with their respective
taxpayer-spouses and (2) rental agreements or arrangements with
those spouses. In McNamara I, the taxpayer-owners of the farm-
land in question entered into (1) an employment agreement or
arrangement with their wholly owned corporation and (2) a rental
agreement or arrangement with that corporation.
In Bot I and Hennen I, the taxpayer-owners of the farmland
in question contended that the respective rental agreements or
arrangements involved in those cases did not require their
material participation in the production of the agricultural
commodities in question. We found that the respective taxpayer-
owners in Bot I and Hennen I played a material role in the
production of such commodities under an agreement or arrangement
with their taxpayer-spouses. We further found in Bot I and
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