Since the late 1980s, the IRS and the courts have issued various rulings, advices, notices and opinions concerning the issue of whether Conservation Reserve Program (CRP) payments are subject to self-employment tax. Until 2003, the IRS always took the position that a taxpayer had to be materially participating in a farming operation for CRP payments to be subject to self-employment tax. The courts agreed. But, in 2003, the IRS took the position in a Chief Counsel Advice that the mere signing of a CRP contract resulted in the signing taxpayer being engaged in the trade or business of farming with the result that the CRP payments were subject to self-employment tax. Now, the U.S. Tax Court agrees. The implications of the court’s decision could be far reaching by subjecting mere passive investors in farmland and non-farming heirs to self-employment tax on CRP rental income.