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Self-employment tax

Tax Court – Sale of scrap metal didn’t result in self-employment income

Tax Court – Sale of scrap metal didn’t result in self-employment income

Ryther, TC Memo 2016-56 The Tax Court has concluded that scrap metal abandoned by a steel-fabrication business and later sold by the owner of that bankrupt business didn’t generate self-employment income.  Click here for the Opinion of the Court. Background. A taxpayer’s self-employment income is subject to self-employment tax. (Code Sec. 1401(a), Code Sec. 1401(b)) Self-employment […]

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IRS disagrees with decision allowing non-farmer to exclude CRP payments from SE income

IRS disagrees with decision allowing non-farmer to exclude CRP payments from SE income

AOD 2015-02,09/23/2015 In an Action on Decision (AOD), IRS has announced its nonacquiesence with an Eighth Circuit decision that held that Conservation Reserve Program (CRP) payments from the federal government to a non-farmer to implement a conservation plan on CRP properties were excluded from net earnings from self-employment as rentals from real estate under Code […]

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Washington Alert – Change in LB&I Division;TIGTA report on IRS options re payment;IRS on ACA – Applicable Large Employers;The Pension Benefit Guaranty Corporation publishes final rule on reportable events

Washington Alert – Change in LB&I Division;TIGTA report on IRS options re payment;IRS on ACA – Applicable Large Employers;The Pension Benefit Guaranty Corporation publishes final rule on reportable events

A big shakeup is underway for IRS’s Large Business and International (LB&I) Division, and its new look will be launched in the early months of 2016, according to Douglas O’Donnell, commissioner of the division. O’Donnell and several other agency officials revealed a number of key details during their appearance at a Sept. 17 conference in […]

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Partners weren’t “limited partners” exempt from self-employment tax

Partners weren’t “limited partners” exempt from self-employment tax

Chief Counsel Advice 201436049 In Chief Counsel Advice (CCA), IRS has concluded that partners of a a partnership whose primary source of income was from fees for providing investment management services were not “limited partners” exempt from self-employment tax under Code Sec. 1402(a)(13) on their distributive shares of partnership income. Background. In general, a partner […]

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Supreme Court – No review of case finding couple got full credit for self-assessed employment taxes

Supreme Court – No review of case finding couple got full credit for self-assessed employment taxes

Western Management, Inc. v. U.S., CA FC 02/07/2014, 113 AFTR 2d 2014-841, cert denied 05/19/2014.In a case with a long history, the Supreme Court has declined to review a Federal Circuit decision that found that a couple got full credit for self-assessed employment taxes. Facts. Robert Kovacevich formed a C corporation, Western Management, Inc. (WMI). […]

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Tax Court – Payments to partner were guaranteed; IRS may impose self-employment taxes

Tax Court – Payments to partner were guaranteed; IRS may impose self-employment taxes

In Seismic Support Services, LLC, Scott A. Whittington, Tax Matters Partner v. Commissioner, TC Memo 2014-78, the Tax Court has held that disbursements from a limited liability company, which was engaged in consulting and taxed as a partnership, to its primary owner who performed all of its services were guaranteed payments. As a result, in […]

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Final regs explain additional Medicare tax on employees and self-employed persons

Final regs explain additional Medicare tax on employees and self-employed persons

IRS has issued final regs on the additional 0.9% Medicare tax on employee compensation and self-employment income above a threshold amount received in tax years beginning after Dec. 31, 2012.  The final regs do not contain any significant changes from the proposed regs on this subject that were issued late in 2012.  T.D. 9645, 11/26/2013; […]

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Case Alert: Spouses had to separately compute their self-employment tax

Case Alert: Spouses had to separately compute their self-employment tax

The Tax Court, in Donald and Brenda Fitch, T.C. Memo. 2013-244, ruled that a husband and wife residing in a community property State had to separately compute their self-employment tax under Code Sec. 6017. They couldn’t combine the net income from the wife’s realty business with the net losses from the husband’s accounting practice. Background. […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney