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1988. The Form 1099 from Masterguard reported nonemployee
compensation paid to petitioner in the amount of $20,309 for
1988. Petitioner contends that neither of the above-described
Forms 1099 is valid and that, therefore, the statutory notice of
deficiency itself is invalid. More specifically, petitioner
contends that the Form 1099 issued to him by Masterguard is
invalid because a portion of the amount Masterguard reported as
nonemployee compensation could have been for merchandise refunds.
Petitioner's memorandum and testimony both fail to address the
validity of the Form 1099 issued to him by Lexington State Bank.
In his memorandum and testimony, petitioner argues that no
section of the Internal Revenue Code requires him to pay income
tax. Petitioner states that he is "a Sovereign Citizen of the
South Carolina Republic". Petitioner's written and oral
explanations also include citations of a number of unrelated
sections of the Internal Revenue Code and the Uniform Commercial
Code that he contends provide a basis for his claim that he is
not liable for Federal income tax.
Masterguard is a wholesaler of early warning fire protection
equipment, which includes single station battery-operated smoke
detectors, single station mechanical heat detectors, and portable
fire extinguishers. Petitioner conceded at trial that he
purchased merchandise from Masterguard in 1988. According to
petitioner, he paid for any merchandise he received from
Masterguard upon receipt. However, petitioner also testified
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