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living and dining room area. Petitioner had six telephone lines
running into the home office.
As indicated, petitioner paid employees of his scrap metal
recycling business in cash. Employees of petitioner’s scrap
metal recycling business were generally hired on a temporary
basis by petitioner’s warehouse foreman. The employees generally
were transient or homeless individuals and worked in the
warehouse. Employees of petitioner’s scrap metal recycling
business were required to sign a written agreement, but there was
no line on the agreement to indicate an employee's Social
Security number or personal address, and neither petitioner nor
the warehouse foreman generally obtained Social Security numbers
or addresses of the employees.
Petitioner did not prepare and submit Forms W-2 or 1099 with
respect to wages paid to employees of his scrap metal recycling
business, and petitioner withheld no Federal or State taxes with
regard to wages paid to his employees.
At the end of each day, petitioner’s warehouse foreman would
prepare a written cash report and would indicate thereon amounts
paid and received that day from the purchase and resale of scrap
metal, wages paid to employees, and expenses paid at the
warehouse. Generally, at the end of each day the warehouse
foreman also would call petitioner and provide petitioner with
information concerning the cash received and spent at the
warehouse that day.
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Last modified: May 25, 2011