106 T.C. No. 14
UNITED STATES TAX COURT
JOHN D. AND KAREN BEATTY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
Docket No. 8273-94. Filed April 17, 1996.
P, an Indiana county sheriff, was required by State
statute to provide meals to the prisoners incarcerated in
the county jail. The costs of providing the meals were
borne by P. P received a meal allowance from the county on
a per meal basis at a specified rate established by the
State. P claims that he provided the meals to the county
prisoners as an independent contractor, and reported the
meal allowances received and costs incurred on a Schedule C.
R contends that P provided the meals to the county prisoners
as an employee of the county and must deduct such costs on a
Schedule A as employee business expenses. Held: The costs
of the meals constitute costs of goods sold and are taken
into account in the determination of P's gross income.
Consequently, under the circumstances of this case, it makes
no difference for Federal income tax purposes, whether P
provided the meals to the prisoners as an independent
contractor or county employee.
Stephen E. Arthur and Ronald M. Soskin, for petitioners.
Ronald T. Jordan, for respondent.
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