- 5 -
he abandoned the activity in September 1993. He has not leased
or trained any horses since that time.
The first issue for decision is whether petitioner is
entitled to exclude from his gross income the per diem payments
that he received from Romer during 1993.
Petitioner submitted three invoices to Romer on which he
claimed that he worked in Minnesota for four days in mid-January
1993 and 2-l/2 days per week for the following 49 weeks for a
total of 126-1/2 days for the year. Romer issued three checks to
him during 1993 in the total amount of $10,752. Petitioner did
not report the $10,752 on his 1993 return. In the statutory
notice of deficiency, respondent determined that the payments
must be included in gross income.
Section 61(a) includes in gross income all income from
whatever source derived. Commissioner v. Glenshaw Glass Co., 348
U.S. 426 (1955). However, section 1.62-2(c)(4), Income Tax
Regs., provides:
Amounts treated as paid under an accountable plan are
excluded from the employee's gross income, are not
reported as wages or other compensation on the
employee's Form W-2, and are exempt from the
withholding and payment of employment taxes * * *
[FICA, FUTA, RRTA, RURT, and income tax]. * * *
Section 1.62-2(c)(2)(i), Income Tax Regs., provides that in
order for amounts paid under an arrangement to be treated as paid
under an accountable plan the arrangement must satisfy a business
connection requirement, a substantiation requirement, and a
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011