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Once the Commissioner meets this burden, the taxpayer must
come forward with persuasive evidence that the Commissioner’s
determination is incorrect. Rule 142(a); Higbee v. Commissioner,
supra at 447. As a defense to the addition to tax, the taxpayer
bears the burden of proof regarding reasonable cause and lack of
willful neglect. Sec. 6651(a). To the extent that the taxpayer
shows there was reasonable cause for an underpayment and that he
acted in good faith, section 6664(c)(1) prohibits the imposition
of an accuracy-related penalty.
A. Exemption From Self-Employment Tax
Section 1401 imposes a tax on an individual’s self-
employment income, based on the “net earnings from self-
employment” derived by an individual during the taxable year.
Sec. 1402(b). Net earnings from self-employment are the gross
income derived by the individual from any trade or business
carried on by that individual less the deductions attributable to
that trade or business. Sec. 1402(a). Section 1402(c)(4) and
the final sentence of section 1402(c), however, provide that the
term “trade or business” does not include “the performance of
service by a duly ordained, commissioned, or licensed minister of
a church in the exercise of his ministry” if an exemption under
section 1402(e) is in effect.
Section 1402(e) provides specific requirements for a
minister to obtain an exemption from self-employment tax. A
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Last modified: March 27, 2008