Juan N. and Miriam J. Villareal, et al. - Page 3

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          share of taxable community property income for the 1995 taxable             
          year and the correct amount of such income; (3) whether each                
          petitioner is liable for self-employment tax for the 1995 tax               
          year; and (4) whether each petitioner is liable for the addition            
          to tax under section 6651(a)(1) for failure to timely file a                
          Federal income tax return for the 1995 tax year.                            
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein by this reference.  At the time the petition            
          was filed, petitioners resided in San Antonio, Texas.                       
                                  FINDINGS OF FACT                                    
               In 1994, petitioner worked for Alamo Body and Paint (Alamo)            
          in San Antonio.  In late 1994, petitioner quit his job at Alamo             
          and decided to open a restaurant called Villa Cabana.                       
               Petitioners signed a 3-year lease for commercial space in              
          San Antonio, bought equipment, and stocked the restaurant with              
          food and supplies.  Petitioners also attended courses in food               
          handling and arranged for business and health department                    
          licensing.  After some initial difficulty with a natural gas                
          leak, Villa Cabana opened for business on December 23, 1994.                
               Beginning in 1995, petitioners hired additional people to              
          work in the restaurant, but the record is not clear as to the               
          type of work performed by the additional help.  Petitioner worked           
          as the restaurant cook and petitioner wife waited tables.                   
          Petitioner also purchased supplies for the restaurant.                      




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