here, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
Background
Petitioner resided in Irving, Texas, at the time the
petition in this case was filed.
On or about April 15, 1992, petitioner filed her 1991
Federal income tax return. The return reported two items of
income: (1) $7,700 of wages and (2) $2,427.25 of other income
(with a handwritten note “MISC INCOME”). For petitioner's 1991
tax year, respondent received two Forms 1099. A Form 1099-MISC
from Dr. Mark Imhoff, an individual for whom petitioner had
rendered services, indicated that petitioner had been paid
$4,147.50. The Form 1099-MISC reported the income as nonemployee
compensation. In addition, a Form 1099-INT indicated that
petitioner had been paid $12 of interest income.
On January 18, 1994, respondent mailed a 30-day letter to
petitioner. The letter indicated that respondent proposed to
increase petitioner’s taxable income by $3,866.50 ($12 interest
plus $4,147.50 nonemployee income less a $293 self-employment tax
deduction). The proposed increase produced an additional tax
liability of $1,163 and accrued interest of $162. The letter
stated that if petitioner did not respond within 30 days,
respondent would issue a notice of deficiency. The letter
further stated that if petitioner did not agree with respondent's
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