Case: Publishing Contract Amounts Subject to Self-Employment Tax (T.C. Memo) (IRC §1401)

Amounts author received under publishing contracts subject to self-employment tax where she was in the trade or business of writing, the U.S. Tax Court held in a memorandum opinion. The IRS issued a notice of deficiency to Taxpayer, an author, stating that payments she received pursuant to her publishing contracts were derived from her trade or business as an author and subject to self-employment tax. Taxpayer disagreed, arguing that only a portion was allocable to her trade or business, and the rest was paid for her name and likeness. The court agreed with the IRS and stated that Taxpayer’s brand ...