Folks,
I have drafted the less "legalese" letter below. What do you think? I assume that IRS is aware of their own definitions, and I am not sure that reciting them makes for a more compelling argument (and I'd like this to be "easy to read" so as not to turn this into a time sink for the person who reviews it). Either way, I do very much appreciate that you included the citations because it is good education for me.
Thank you for the time spent looking and replying.
To Whom it May Concern:
I disagree with the charges proposed in the notice dated July 25, 2022. This notice describes that the IRS has classified the sum of [dollar value redacted] Book Royalties from Schedule 1, line 8 of our 2020 federal income tax return as self-employment income, and then calculated self-employment tax on this income. These royalties are generated from books that my deceased grandparents authored mostly between [dates redacted]. I receive a portion of the royalties as an heir.
Because these royalties are not generated by any trade or business carried on by me or by my wife, I do not believe that the income is subject to self-employment tax.
Please see attached photos of two disbursal checks (partial sum of the 2020 income) from the bank account of [grandparent/author name redacted]. The books of [grandparent/author names] are well documented. The Wikipedia entry below includes a concise list of their best known works.
https://en.wikipedia.org/wiki/[redacted]
Please let me know if there is anything else I can do to help settle this matter.
Sincerely,
