Norma Neiman - Page 3

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            our findings are based on the pleadings and documents submitted                            
            at trial.                                                                                  
                  Jacob B. Neiman, petitioner's husband, was an insurance                              
            agent for many years.  During 1990, he did business with the Irv                           
            and Bob Kemp Agency (Kemp).  During 1990, Jacob B. Neiman was                              
            paid $14,5425 in first year commissions.  He was also paid $2,665                          
            in renewal commissions in 1990.  Kemp sent Mr. Neiman Forms 1099                           
            with respect to these two payments.  Kemp also advanced Mr.                                
            Neiman $4,080 in 1990.  Mr. Neiman agreed to repay the advance by                          
            offsetting the payment against future commissions.  The advance                            
            was repaid sometime in 1992.  No Form 1099 was issued to Mr.                               
            Neiman with respect to the $4,080 advance made in 1990, nor was                            
            the amount included as income on the 1990 return.                                          
                  On Schedule C of the jointly filed Federal income tax return                         
            for 1990, petitioner and her husband reported the $14,542 payment                          
            and the $2,665 payment.  Petitioner then subtracted the $4,080                             
            advance from the commission income reported on the return.                                 
                  In the notice of deficiency, respondent determined that                              
            commission income was understated by $4,080.  Petitioner                                   
            acknowledges that the $4,080 was erroneously deducted from                                 
            commission income received, and, therefore, the income on the                              
            1990 return was understated by $4,080.  Petitioner argues that                             
            she should be excused from liability for tax on the                                        


            5  Rounded to nearest whole dollar.                                                        




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