- 15 -
A. Normally on -- not on any given time. He would just
come over and pay me, and say, This is what I owe you.
And I said, Fine.
Q. And you would just say, That's fine.
A. That's correct.
Petitioner's explanation for his failure to report, or even
to estimate, the income received from Mr. Hall on his 1989, 1990,
and 1991 returns was both inconsistent and implausible. See
Factor v. Commissioner, 281 F.2d 100, 129 (9th Cir. 1960), affg.
T.C. Memo. 1958-94. Petitioner contends that he did not report
the income he received from Mr. Hall because Mr. Hall failed to
issue Forms 1099 to him for the years in issue and petitioner had
no way of estimating the amount of the payments.7 Petitioner's
testimony explaining why he did not estimate the amount of these
payments on his tax returns is less than clear:
Q. Was it possible to determine how much you received,
based on deposits to bank accounts or other
documentation?
A. Not based on that because there were some expenses
involved.
Q. Explain that to us, if you would. How were the
expenses entered into this?
A. Well, there was equipment that was purchased, vehicles
that were purchased, et cetera.
7Citing Harper v. Commissioner, 54 T.C. 1121, 1141 (1970),
petitioner argues that the nonreceipt of a Form 1099 is a
mitigating factor in cases where, as here, the taxpayer reports
all of his other income. However, that case is distinguishable
on its facts and does not support petitioner's argument.
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