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The last issues before us concern whether petitioners are
liable for the self-employment tax and whether petitioners are
entitled to a corresponding deduction for one-half of the self-
employment tax to be paid.
Section 1401(a) imposes a tax upon the self-employment
income of every individual. In general, self-employment income
consists of the net earnings derived from an individual (other
than a nonresident alien) from a trade or business carried on by
such an individual. Sec. 1402(a) and (b); sec. 1.1401-1(c),
Income Tax Regs. An individual is subject to self-employment tax
if his or her net earnings from self-employment exceed $400 for
the taxable year. Sec. 1402(b)(2).
In this case, although petitioners dispute that Mrs. Harper
was an independent insurance agent with Primerica during the
taxable year in issue, they do not disagree that Mrs. Harper was
at one time an agent for Primerica.1 Moreover, and based on our
foregoing discussion, we believe that the income received by Mrs.
Harper in 2003 was derived directly from her work as an
independent insurance agent with Primerica, either in 2002 or
2003. Accordingly, the Court holds that Mrs. Harper earned
income in 2003, and is, therefore, both liable for self-
1 We note that no argument or evidence was presented as to
whether Mrs. Harper was an employee or statutory employee under
sec. 3121(d).
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