I read all of these posts.  I think you are my new hero.  I am very happy you are sticking to your guns.  I believe you are 100% right, but people are expecting that there needs to be a law that says in every specific scenario, a specific thing is taxable.  That is not the case.  Everything is subject to tax.  All SE income is subject to SE tax.  

I am going to help and cite IRC Section 61.  This is the code that says everything is taxable.  

I am then going to cite IRC Section 6017 which says all (schedule C) business income over $400 is subject to SE tax (kind of in a loose way).

I am then not going to cite anything else, because that's where it ends.  

I learned a long time ago from my very first tax class that everything is taxable per IRC Sec 61.  The entire rest of the tax code is there to help make it non-taxable.  If there isn't a law that says it isn't taxable, then it is taxable.  I am assuming that SE tax is the same way.  

The absence of a law, means it is subject to regular and SE tax.  All of the arguments against "qbteachmt" have a specific tax code assigned to them to make them treated in those specific ways.  Grants are not unemployment, as unemployment is defined in IRC Section 85.  Nowhere does it mention grants.  

Someone pointed out that it was a waste of "qbteachmt"'s time to respond to these.  I would agree that it is probably a waste of your time to have to respond to all of this, however, your passion to stick to reality helped me immensely; to find that no one knows of a law which exempts it. 

I get it.  A schedule C making money to be right in the area of SE tax is going to be a huge deal for that taxpayer.  I appreciate the passion everyone has for their client to save money.  It just seems like the most important fact was lost in all of this, and "qbteachmt" repeated it multiple times:

It is irrelevant whether the grant is subject to SE tax. The grant MUST be spent on specific expenses. This means that the grant is offset by specific expenses, therefore making none of it in the Net income subject to SE.  In other words, the grant comes in, the expenses reduce the grant to zero, and those expenses no longer reduce SE revenue. So now the revenue subject to SE tax is higher by the amount of the grant.  The grant goes inside of the Sch C and is going to indirectly increase SE income regardless of it being earned or not.

I do appreciate all of the people stating that we need primary sources, but sometimes the lack of a code just means that the bad thing is correct.

"qbteachmt" thank you for all of the time and energy which you invested in this article.  I appreciate it and the lack of official reg or IRC citing.  You were technically citing the lack of code sections the entire time (even though you cited IRS guidance towards the lack of codes).