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defined as the net income derived by an individual from any trade
or business carried on by such individual. Sec. 1402(a) and (b).
Exceptions from inclusion in net earnings from self-employment
are construed narrowly. Johnson v. Commissioner, 60 T.C. 829,
833 (1973).
As explained in our prior opinion, because he completely
controlled all aspects of the nominee corporations and because he
treated the nominee corporations as his alter ego in connection
with his trade or business of providing medical services and
products and other related activities, Ahmed earned the income
that was collapsed and charged to him personally. Because Ahmed
earned the collapsed income in his trade or business, the income
constitutes net earnings from self-employment and thus self-
employment income.
As explained, at trial Ahmed stipulated that the collapsed
income from the nominee corporations would be treated as earned
by Ahmed individually. The stipulation does not indicate that
the collapsed trade or business income should be treated
differently from other trade or business income earned by Ahmed.
Respondent, in his notice of deficiency, determined that
self-employment taxes should be imposed on income collapsed from
the nominee corporations. On brief, Ahmed did not specifically
argue that respondent improperly imposed self-employment taxes on
the collapsed income, and we therefore conclude that Ahmed
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Last modified: May 25, 2011