Ernest L. and Kathleen Newsome - Page 2

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            and 1992 Federal income taxes in the amounts of $5,256 and                                 
            $5,169, respectively.                                                                      
                  The issue for decision is whether petitioners underreported                          
            gross receipts from a newspaper delivery service business                                  
            conducted by Ernest L. Newsome during 1991 and 1992.                                       
            Background                                                                                 
                  Some of the facts have been stipulated, and they are so                              
            found.  At the time of the filing of the petition, petitioners                             
            resided in Fort Worth, Texas.  References to petitioner are to                             
            Ernest L. Newsome.                                                                         
                  Starting as a child, and for a number of years prior to the                          
            years in issue, petitioner had been employed, in various ways, as                          
            a newspaper carrier or delivery person.  He began delivering                               
            newspapers for the Fort Worth Star Telegram (the Star Telegram)                            
            sometime in the early 1980's.  During the years in issue he                                
            delivered newspapers for the Star Telegram on an independent                               
            contractor basis.  Using the cash receipts and disbursements                               
            method of accounting, petitioner reported the income earned and                            
            the expenses incurred in the operation of his newspaper delivery                           
            service business on Schedules C for the years 1991 and 1992.                               
                  During the years in issue, the Star Telegram published                               
            morning and evening editions from Monday through Friday, and a                             
            single edition on Saturdays and Sundays.  Consequently,                                    
            petitioner delivered newspapers to his customers twice a day                               
            during the week and once per day on Saturdays and Sundays.                                 




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