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our consideration are: (1) Whether petitioner has shown that she
is entitled to deduct any part of the $459,650 that she claimed
as commissions and fees, and (2) whether petitioner is liable for
the penalty and addition to tax determined by respondent.
FINDINGS OF FACT
Petitioner resided in Pomona, California, at the time her
petition was filed in this case. Her 1992 Federal income tax
return was filed on April 18, 1994. On Schedule C, petitioner
reported gross receipts of $1,014,498.29 from her business as a
“Dress Maker” operating under the name “California Fashion”.
After accounting for returns and allowances and cost of goods
sold, a gross income of $534,009.26 was reported. Among other
expenses, petitioner claimed commissions and fees in the amount
of $459,650. The sole adjustment by respondent to petitioner’s
Schedule C reporting was the disallowance of the entire amount
claimed for commissions and fees.
Petitioner’s business involved the manufacture of dresses on
a piecework basis. Jose Antonio Garcia Juarez2 was employed by
petitioner during 1992. He was paid approximately $200 to $220
per week, he worked long hours, and he knew how to perform all
tasks involved in the operation of the business. Mr. Juarez did
not share in petitioner’s business profits for 1992. At some
2 Mr. Juarez has also been known as Mr. Garcia in portions
of the record.
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