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it should not. Section references are to the Internal Revenue
Code in effect for the years in issue.
Background
Petitioners resided in New Jersey when they petitioned the
Court. During the relevant years, Gregory Summers was a general
partner in Summers & Co. Summers & Co. provided professional
accounting and computer services.
Respondent issued petitioners a notice of deficiency (the
Notice) on April 26, 1993. The Notice reflected respondent’s
determination that petitioners did not file a Federal income tax
return for 1984 or 1985, and that petitioners’ taxable income for
those years was $166,778 and $119,972, respectively. In relevant
part, respondent determined the following items and amounts of
income:
1984 1985
Schedule C--Summers & Co $65,907 $44,834
Schedule E--Summers & Co 100,812 85,730
Partnership losses:
Summit Equities (4,195) ---
CCA ( 59) ( 474)
In their petition, petitioners allege error with respect to all
of these amounts, except for the partnership losses.
The Notice also states that petitioners are liable for
self-employment tax with respect to 1984 and 1985 self-employment
income of $37,800 and $39,600, respectively.1 In their petition,
1 These amounts are the maximum amounts of self-employment
(continued...)
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