Misc Income subject to SE Tax?

[Christian]

I once had a client who had a one time 1099-Misc caused by her service as the executor of an estate. Be darned if they did not come back on her for SE tax even though she was not regularly employed in administering estates !

[JohnH]

She sent the proper response and got them to drop the S/E tax assessment didn't she?

[kcjenkins]

I once had a client who had a one time 1099-Misc caused by her service as the executor of an estate. Be darned if they did not come back on her for SE tax even though she was not regularly employed in administering estates !

​She did not pay it, did she?  The rules are very clear on that.

Executor or administrator.   If you administer a deceased person's estate, your fees are reported on Schedule C or C-EZ if you are one of the following:

1. A professional fiduciary.

2. A nonprofessional fiduciary (personal representative) and both of the following apply.

   1. The estate includes an active trade or business in which you actively participate.

   2. Your fees are related to the operation of that trade or business.

3. A nonprofessional fiduciary of a single estate that requires extensive managerial activities on your part for a long period of time, provided these activities are enough to be considered a trade or business.

 

   If the fees do not meet the above requirements, report them on line 21 of Form 1040.

[Christian]

Alas no. She fired me and I suppose paid it despite my desire to send a letter and get it dropped. She came across as a nervous nelly and I was unable to get her to see reason. I originally reported it on the other income line 21 of Form 1040 thinking the Service could see she had never been an executor before.

Edited April 30, 2015 by Christian

[RitaB]

Alas no. She fired me and I suppose paid it despite my desire to send a letter and get it dropped. She came across as a nervous nelly and I was unable to get her to see reason.

​Well, then, she deserved to pay a stupid tax, so it all worked out.  Seriously, though, I always enter 1099-Misc income on the line where IRS is going to look for it, and if the form is wrong, subtract it off with an explanation.  Typically back of Sch C, page 2.

Edited April 30, 2015 by RitaB

[joanmcq]

I've gotten CP2000 notices for SE tax even when the amount WAS listed in Box 3, so don't feel bad.  Stupid tax is right.

[mcb39]

I got a reprimand and a slapped hand today from the IRS with a threat of a $500 fine for not filing an 8867 on a EITC return.  Funny thing was that I had originally filed it with the 8867 and file was rejected because minor daughter had already claimed herself as a dependent.  When I paper filed and amended the daughter, I forget to attach a copy of the 8867 to the return.  Sheeesh!!!!!!  This was not my first rodeo.  They sent it by Certified mail and when I called the number on the letter, I got a recording who continued to reprimand and threaten me in no uncertain terms.  They did say that I was not getting a penalty at this time, but just remember that the Big Boys are watching me.  No chance to defend or explain.  They sure know how to make your day.

[kcjenkins]

Perhaps we need to sue them over their misleading name, since "Service" seems to have been deleted from their vocabulary?