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The issues for decision are: (1) Whether petitioner was
engaged in a trade or business as an independent contractor or as
an employee during the years at issue; (2) whether petitioner is
entitled, in connection with his activity, to a deduction for
meals for 1995 and 1996; and (3) whether petitioner is liable for
the section 6662(a) penalty for the years 1995 and 1996.2
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. At the time the petition was filed, petitioner's
legal residence was Reno, Nevada.
Petitioner was a process server. He began this activity in
1983, when he lived in the San Francisco, California, bay area.
In 1987, he moved to Reno, Nevada, and continued the activity
there. In 1998, he discontinued the activity and took a full-
time job with a gambling casino.
In the Reno, Nevada, area, during the 3 years at issue,
petitioner's process-serving activity was conducted through the
Reno Carson Messenger Service (the Messenger Service) that was
owned by a third party. Petitioner derived all of his process-
serving work from the Messenger Service. Petitioner was required
to use his own vehicle and was assigned a certain geographic area
2 In the notice of deficiency, respondent disallowed a
deduction for utilities claimed by petitioner for 1994 and 1995.
At trial, petitioner conceded this adjustment.
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