JohnnyCash,

Be careful with how you interpret tax code and be aware of how the courts interpret. Idaho State Tax Commision published this decision. Idaho Code relies on Internal Revenue Code.

"The taxpayer argued the amounts reported on the Forms 1099-MISC were incorrectly
shown as nonemployee compensation because this alleges he was in a trade or business, and a
trade or business is defined by IRC section 7701(a)(26) as the performance of the functions of a
public office. The taxpayer stated neither he nor the payers identified on the Forms 1099 were
involved in the performance of the functions of a public office.

In his interpretation of IRC section 7701(a)(26), the taxpayer misses a key component of
that section’s definition of the term “trade or business.” Subpart (26) states, “The term ‘trade or
business’ includes the performance of the functions of a public office.” This subpart does not
state that a trade or business is exclusively the performance of the functions of a public office. It
states it includes the performance of the functions of a public office. In fact, IRC section 7701(c)
defines the terms “includes” and “including” when used in a definition contained in the IRC. It
states that the terms includes and including shall not be deemed to exclude other things otherwise
within the meaning of the term defined. Therefore, the term trade or business also includes those
things generally attributable to the words trade and business.

Regardless of whether the taxpayer believes the services provided to the payers listed on
the Forms 1099-MISC constitutes or comes up to the level of a trade or business, the taxpayer
received compensation or remuneration for his services. According to IRC section 61, that
DECISION - 4
[Redacted] compensation is part of the taxpayer’s gross income."

http://tax.idaho.gov/decisions/0720157.pdf