Larry C. Gamsby - Page 2

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          Background                                                                  
               Larry C. Gamsby (petitioner) failed to file income tax                 
          returns for the taxable years 1991 and 1992.  However, respondent           
          received Forms 1099-NEC from 2 payors indicating that petitioner            
          received nonemployee compensation in the amount of $24,910 and              
          $26,673 for the taxable years 1991 and 1992, respectively.                  
               Revenue Agent Joan Rice conducted an examination of                    
          petitioner's tax liability for 1991 and 1992.  By letter dated              
          November 22, 1994, Revenue Agent Rice forwarded a copy of her               
          revenue agent's report to petitioner and advised petitioner that,           
          despite the Forms 1099-NEC filed with respondent, the facts                 
          supported petitioner's contention that petitioner should be                 
          classified as an employee for the taxable years in issue.                   
               On September 13, 1995, respondent issued a notice of                   
          deficiency to petitioner.  In the notice, respondent determined             
          that petitioner was liable for deficiencies in and additions to             
          his Federal income taxes for 1991 and 1992 as follows:                      
                                             Addition to Tax                          
                    Year      Deficiency     Sec. 6651(a)(1)1                         
                    1991       $6,164             $1,541                              
                    1992        6,600              1,650                              
          Contrary to the conclusion reached by Revenue Agent Rice in her             
          report, respondent determined in the notice of deficiency that              

          1  All section references are to the Internal Revenue Code,                 
          as amended; all Rule references are to the Tax Court Rules of               
          Practice and Procedure.                                                     




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