The petitioner operated a sole proprietorship and incurred a net operating loss (NOL) of $81,957 in 2007 and an NOL of $91,812 in 2008. He claimed that the NOL carryover relating to 2007 could offset his 2008 net self-employment earnings. The IRS disagreed and the court agreed with the IRS. The court noted that I.R.C. Sec. 1402(a)(4) specifically provides that when determining self-employment earnings, the deduction for an NOL is not allowed. The court also applied the I.R.C. Sec. 6651(a)(1) penalty for failure to timely file a return. Stebbins v. Comr., T.C. Sum. Op. 2015-10.