Opinion ID: 771596
Heading Depth: 2
Heading Rank: 4

Heading: The Hennens

Text: 11 John P. and Teresa Hennen have farmed together for thirty-eight years. During 1994, 1995, and 1996--the years at issue--Mr. Hennen operated an 1,100-acre crop and livestock farm in Minnesota as a sole proprietor. Mrs. Hennen owned approximately two hundred of those acres, which she rented to Mr. Hennen under an oral agreement. For each of the years at issue, Mrs. Hennen provided--pursuant to employment agreements with Mr. Hennen--services to the farming operation including bookkeeping, running errands, and help with livestock chores and fieldwork. The employment agreements essentially memorialized the duties Mrs. Hennen had performed since she began farming with Mr. Hennen. 12 The Hennens also filed jointly as a married couple. They reported on Schedule E for each year at issue that Mrs. Hennen received net rental income of approximately $12,000 to $14,000. They also reported that Mrs. Hennen received wages from Mr. Hennen of roughly $3,000. The Commissioner determined that the rental payments Mrs. Hennen received from Mr. Hennen were includible as net earnings from self- employment under 1402(a)(1) and thus subject to self-employment tax. The Hennens contested the Commissioner's determination in the Tax Court, which rejected the Hennens' arguments in an opinion echoing its ruling against the McNamaras. 13 The McNamaras, Bots, and Hennens all appeal.