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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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