Denson C. and Linda C. Brumley - Page 4

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          orally moved for summary judgment which we treated as a motion              
          for entry of decision based upon the fact that no further issues            
          remained to be heard in this case.  Petitioners’ counsel did not            
          dispute the unreported income determined by respondent, but                 
          argued that petitioners are entitled to be heard on the issue of            
          deductible business expenses.                                               
               Petitioners filed their joint Federal income tax return for            
          1994 on January 9, 1996.  Included as wages on Line 7 of the                
          return was the amount of $31,297 paid by Preneed Marketing                  
          Associates to petitioner Linda Brumley (Ms. Brumley).  This                 
          amount was reported on a Form 1099--MISC. issued to Ms. Brumley             
          by the payor.                                                               
               Respondent determined in the notice of deficiency that                 
          petitioners were subject to self-employment tax for 1994 on the             
          $31,297 received by Ms. Brumley and liable for the addition to              
          tax for failure to timely file their joint Federal income tax               
          return for 1994.  This is the only adjustment to petitioners’               
          Federal income tax return for 1994 made by respondent in the                
          notice of deficiency.                                                       
               In his opening statement on Wednesday, February 11, 1998,              
          Mr. Tijerina conceded that Ms. Brumley was self-employed in 1994            
          and her income was subject to self-employment tax.  However, he             
          claimed for the first time that Ms. Brumley is entitled to                  
          certain business expense deductions incurred in earning her                 





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