Rev. Rul. 60-20

The Internal Revenue Service has been requested to advise whether the fees received by a doctor of medicine for the performance of professional services as an oral surgeon are includible in computing his net earnings from self-employment under the Self-Employment Contributions Act of 1954, as amended by the Social Security Amendments of 1956 (chapter 2, subtitle A, Internal Revenue Code of 1954), where such individual also is generally licensed to engage in the practice of oral surgery in the capacity of a licensed dentist.

The individual in the instant case is licensed to perform services in the exercise of his profession as a doctor of medicine and/or as a dentist. He specializes in the practice of oral surgery, some procedures of which can be legally performed by either a licensed doctor of medicine or by a licensed dentist. However, some of the surgical procedures performed by the doctor herein considered were such as to require the services of a duly licensed doctor of medicine. They could not be performed by a licensed dentist. His professional services are principally confined to the treatment and relief of injuries or disease of the oral cavity, jaws, and related structures, including plastic surgical procedures to the head and neck and other surgical procedures which are within the scope of the field of otorhinolaryngology. He is not associated with any other practitioner, either medical or dental. He is on the staff of several hospitals as a consultant in the field of oral surgery and is carried on their rolls as a physiciandentist. His status as a physician is of primary importance in his relationship with these hospitals, although he does not hold himself out to the public as a general practitioner either as a doctor or as a dentist.

The Self-Employment Contributions Act of 1954 imposes a tax on the self-employment income of every individual. Self-employment income is based upon net earnings from self-employment. The term `net earnings from self-employment' means the gross income derived by an individual from any `trade ro business' carried on by such individual either individually or as a member of a partnership, less the deductions allowed by Chapter 1 of the Internal Revenue Code of 1954 which are attributable to such trade or business.

Section 1402(c)(5) of the Self-Employment Contributions Act of 1954 , prior to the enactment of the Social Security Amendments of 1956, excluded from the term `trade or business' the performance of service by an individual in the exercise of his profession as a physician or as a dentist. Therefore, for taxable years ended prior to 1956, professional services performed by an individual in oral surgery, either as a physician or as a dentist, were clearly excluded from the term `trade or business' by virtue of the exclusion contained in section 1402(c)(5) of the Act. However, under the 1956 amendments, dentists were removed from the category of excluded professions and became eligible for self-employment coverage with respect to taxable years ended after 1955.

Some of the surgical procedures performed by the individual in question in connection with the practice of oral surgery may be perquestion by an oral surgeon licensed to engage either in the practice of dentistry or in the practice of medicine. Since he is licensed both as a doctor of medicine and as a dentist, he is performing professional services which may, when separately related to his professional qualifications and practice, qualify either as excluded or nonexcluded services under the Act. The question for determination is how this situation will affect his status for self-employment coverage purposes with respect to services performed as an oral surgeon, that is, whether such services should be excluded as being performed in the exercise of his profession as a doctor of medicine, or nonexcluded as being performed in the exercise of his profession as a dentist.

Many doctors specialize in a particular branch of the medical profession, after becoming qualified to practice medicine generally. It necessarily follows that practice in a specialized or limited field of the medical profession by a licensed doctor of medicine, who holds himself out to the public as such, constitutes the performance of service by such individual in the exercise of his profession as a doctor of medicine even though his specific service may properly be performed by an individual who is not a duly licensed doctor of medicine. Thus, professional services of a character normally performed by a duly licensed podiatrist, chiropodist, dentist, pharmacist or registered anesthetist do not in and of themselves come within the exclusion contained in section 1402(c)(5) of the Self-Employment Contributions Act of 1954, as amended. A properly licensed doctor of medicine, however, who limits his practice to or specializes in the performance of such services, or in any other professional activity which may be regarded as incidental to the practice of medicine and can reasonably be embraced therein, is nevertheless engaged in the performance of a service in the exercise of his profession as a doctor of medicine within the contemplation of section 1402(c)(5) of the Self-Employment Contributions Act of 1954, even though such doctor of medicine is also a duly licensed practitioner of his specialty which in and of itself does not come within the exclusion. See Rev. Rul. 276, C.B. 1953-2, 88.

Where an individual is duly licensed in two related professions, one of which (in this case medical) includes all the services performed by such individual and the other profession (dental) qualifies him to perform only a portion of the services actually performed by him and he holds himself out to the public as being engaged in the practice of the all-inclusive profession (medical), then, for purposes of the Self-Employment Contributions Act of 1954, all of his services are in the exercise of the profession which includes all of the services which he performs.

In this case the practice of the doctor is limited to oral and plastic surgery. The total procedures involved in such practice could not lawfully be performed by an individual licensed only as a doctor of dentistry. Furthermore, no part of such practice is limited exclusively to services performed by a doctor of dentistry. However, all such services may be performed by a doctor of medicine whether or not he is also licensed to practice as a dentist.

In view of the foregoing, it is concluded that the services in question are performed by the individual in his capacity as a doctor of medicine and are excluded from the term `trade or business' within the contemplation of section 1402(c)(5) of the Self-Employment Contributions Act of 1954. Accordingly, the income derived therefrom is not includible in computing such individual's net earnings from self-employment.