NO SE Tax On Temporary Job

[Uncle Sam]

No SE Tax

I would write to my Congressman to ask.

[dyne]

Thank you Bees Knees and JohnH. Best wishes.

[JohnH]

I've only seen it tested one time. This was over 10 years ago, and I didn't prepare the return. A friend who self-prepares asked me about his situation and I told him about the Batok case.

He was employed full time as a manager for a minI-storage chain, and a friend of his in another town decided to build a mini-storage facility. He provided help in drawing up the site plans, put him in touch with various construction contractors, did some site visits while the facility was under construction, and gave advice on how to set up administrative procedures.

His salary on his main job was about $30k. The friend paid him $6k for the consulting work. He reported the income but did not pay s/e tax on it. A few months later IRS sent him a CP2000, and he replied with an explanation that basically tied his situation to the
Batok case. (I did give him some suggestions on what he letter should say) IRS agreed and the matter was closed.

None of that is to say it would work today, nor that it would have worked at that time if a different person at IRS had reviewed his respond. All I know is that bit saved him about $800 and he was very happy. (he also bought my lunch a few times out of gratitude)

[Bees Knees]

TTB page 5-24

Court Case: The courts have ruled that an activity subject to SE tax must
be regular and continuous. A taxpayer was not liable for SE tax for doing a
one-time window installation job where he had never performed that kind
of service before, nor did he ever again at any time thereafter. (Batok, T.C.
Memo 1992-727)

In my opinion, it is not a very solid case. Each set of circumstances are different, and it is a vague concept. You are playing with fire if, as a tax advisor, you try to tell a client his one time job is not subject to SE tax.

[dyne]

WHAT is the AUTHORITY that states that NO self-employment tax is due on short-term,
or non-recurring or temporary jobs, etc? It was an IRS ruling but I cannot find it now.