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We find his testimony unimpeached and persuasive. Petitioner
testified that he received the amount shown on the 1991 Form
1099, but that he paid 50 percent of this amount to Mr. McManus.
We believe this testimony. We hold that petitioner's 1991 gross
income includes only 50 percent ($19,195) of the amount shown on
the 1991 Form 1099.
With respect to 1993, we hold that petitioner's gross income
includes none of the amount shown on the 1993 Form 1099. We find
that Mr. McManus performed all of the services that generated
this income, and that he ultimately received all of the proceeds
reflected on the 1993 Form 1099 which was issued to petitioner.
Although the checks were payable only to petitioner, the checks
were endorsed on the back as "Pay to the order of Durham
McManus", who ultimately cashed them. We hold for petitioner
with respect to 1993. Our holding on this issue means naturally
that petitioner also is not liable for the addition to tax
determined by respondent for that year.
Turning to the additions to petitioner's 1991 tax,
respondent determined that petitioner failed to file a 1991 tax
return, and that he failed to make any estimated payments for
that year. Accordingly, respondent determined, petitioner was
liable for the related additions to tax. Petitioner contends
that he did not file a 1991 return because he did not have the
money to pay any tax that would have been due with that return.
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