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Patrick Steve O'Brien reported to respondent that he paid
petitioner employee wages in the total amount of $19,212 during
1993. Polar Bear Auto Air reported to respondent that it paid
petitioner nonemployee compensation in the amount of $2,213
during 1993. Arizona DES reported to respondent that it paid
petitioner unemployment compensation in the amount of $700 during
1993.
Arctic Auto Air Electric reported to respondent that it paid
petitioner employee wages in the amount of $27,594 during 1994.
The first issue for decision is whether petitioner received
and failed to report income during the taxable years in issue.
Section 61(a) includes in gross income all income from
whatever source derived including, but not limited to,
compensation for services. Sec. 61(a)(1). Section 85(a)
provides that gross income includes unemployment compensation.
Unemployment compensation means any amount received under a law
of the United States or of a State which is in the nature of
unemployment compensation. Sec. 85(b).
Petitioner alleges that the information returns submitted to
respondent by the reporting payers are unreliable. At trial, he
admitted receiving unemployment compensation from Arizona DES in
the amounts reported to respondent. He refused to admit that he
received employee wages and nonemployee compensation in the
amounts reported to respondent by Village Auto Electric, Patrick
Steve O'Brien, Polar Bear Auto Air, and Arctic Auto Air Electric.
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