Charles A. Dennis and Alison M. Dennis - Page 3

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               (3) Whether petitioners overstated their commission expense            
          on Schedule C of their 1989 return by $403.  We hold that they              
               (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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