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received from an insurance agency deemed a sole proprietorship is
subject to self-employment tax under sections 1401 and 1402.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts, together with attached exhibits, is
incorporated herein by this reference. At the time they filed
their petition, petitioners resided in Washington.
Petitioners were married on April 15, 1972. They lived in
Washington State at all times during their marriage and have no
separate property agreements. Harold D. Edwards, L.L.C. (the
Edwards agency), is an insurance agency owned by Mr. Edwards.
Mr. Edwards established the business in 1963, and it has carried
his name throughout its existence. The Edwards agency sells the
insurance policies of the Farmers Insurance Group (Farmers
Insurance).
At some time before 2003, Mr. Edwards retired from the day-
to-day operation of the business. After Mr. Edwards’s
retirement, petitioners traveled extensively, and Mr. Edwards
spent less than 2 hours per day in his office. Lois Payne (Ms.
Payne), a member of the Edwards agency’s staff and a full-time
employee, assumed most of the managerial duties of the business.
Nevertheless, Mr. Edwards maintained an insurance license, as
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Last modified: March 27, 2008