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(3) Whether petitioners overstated their commission expense
on Schedule C of their 1989 return by $403. We hold that they
did.
(4) Whether amounts received by petitioner during the 1988
through 1991 tax years are advance commissions includable in
income in those years, or loan proceeds. We hold that the
amounts received were loan proceeds.
(5) Whether petitioners are liable for additional self-
employment tax due on the increase in petitioners' nonemployee
compensation for tax years 1988 through 1991. We hold that
petitioners are liable for self-employment tax on a $403 increase
of petitioners' nonemployee income for 1989.
(6) Whether petitioners were negligent or intentionally
disregarded the rules or regulations in filing their tax returns
for the years in issue and are liable for the additions to tax
under section 6653(a) for 1988, and penalties under section 6662
for 1989 through 1991. We hold that the additions to tax or
penalties do apply to the deficiencies as determined herein.
Petitioners resided in Prattville, Alabama, at the time they
filed their petition in this case, which was December 6, 1995.
Respondent sent a notice of deficiency for the 1988 through 1991
tax years on September 29, 1995.
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