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self-employment tax, and that the self-employment income of a
member of MCP includes income that the member derives from the
business conducted by MCP as an agent of the member.
It has been stipulated that before the period in dispute
petitioners purchased shares of stock in MCP and “units of equity
participation”. Petitioners entered into UMAs with MCP in which
they represented they were producers or owners of the corn they
would deliver under the MCP program. Corn was delivered to MCP
to meet petitioners’ obligations to MCP, and they received value-
added payments from MCP. All these factors were present in Bot.
Nevertheless, petitioners maintain the present case should be
distinguished from Bot because they entered into a lease
agreement with Fultz Farms under which they purportedly assigned
to Fultz Farms all their responsibilities and duties as holders
of the units and all the value-added payments due from MCP.
Petitioners also assert that although they received the checks
representing the value-added payments from MCP, they immediately
wrote a check to Fultz Farms for the full amount of each check
issued to them by MCP. Petitioners maintain that once Fultz
Farms was incorporated, they no longer had the assets and ability
needed to grow the corn required by their equity participation in
MCP. Petitioners represent that Fultz Farms assumed the
obligation to produce the corn for MCP pursuant to the lease, and
the payments they personally received from Fultz Farms were akin
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Last modified: May 25, 2011