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from MCP. The Fultz Farms payments were made after the issuance
of the MCP value-added checks to petitioners. Netted across the
years, respondent’s adjustments appear to be lower than the
amounts petitioners received from MCP. Petitioners do not
contest respondent’s adjustment calculations. We accept these
adjustments as a partial concession by respondent. However, our
holding is based upon the original payments from MCP to
petitioners, not petitioners’ relationship with Fultz Farms.
Respondent also made an adjustment increasing petitioners’
income tax deduction equal to one-half of the amount of
petitioners’ self-employment tax for each of 1993, 1994, and
1995.
OPINION
This case presents the question whether value-added payments
petitioners received from MCP, a Minnesota agricultural
cooperative, are subject to self-employment tax under section
1401(a). Payments from MCP have previously been the subject of
decisions of this Court and the Court of Appeals for the Eighth
Circuit, where an appeal of this case would lie. In Bot v.
Commissioner, 118 T.C. 138 (2002), affd. 353 F.3d 595 (8th Cir.
2003), this Court held and the Court of Appeals affirmed that
value-added payments received by members of MCP were subject to
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