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petitioner as an employee of NUS, and required NUS to withhold a
portion of the amounts payable to petitioner. Upon leaving
Singapore, petitioner was required to complete a form relating to
an employee's cessation of employment.
On their U.S. Federal income tax return for the taxable year
1993, petitioners reported the amounts received from NUS as wages
or salary, and claimed the expenses related to the stay in
Singapore on Schedule A as unreimbursed employee business
expenses. Respondent's notice of deficiency recomputed
petitioners' tax liability under the alternative minimum tax.
Respondent determined that, for the purpose of computing the
alternative minimum tax, petitioner's unreimbursed employee
business expenses could not be deducted. See Johnson v.
Commissioner, T.C. Memo. 1993-530.
After receiving the notice of deficiency, petitioners
submitted an amended 1993 return which reported items of income
and expense related to petitioner's activity in Singapore on
Schedule C, rather than on Schedule A. To support this position,
petitioners argue that petitioner was not an employee with
respect to his activities at NUS. Petitioners concede that if
the Court should determine that petitioner was an employee,
respondent's determination in the notice of deficiency is
correct. Respondent concedes that if the Court should determine
that petitioner was not an employee with respect to his
activities at NUS, petitioners may deduct the expenses in
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Last modified: May 25, 2011