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The issues for decision are:2 (1) Whether petitioners
received nonemployee compensation in the amount of $14,288; (2)
whether petitioners are entitled to deduct Schedule C expenses in
the amount of $6,811; and (3) whether petitioners are liable for
the accuracy-related penalty under section 6662(a).
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 Pasadena, California.
Background
Sony Jean Baptiste (petitioner) earned his living as a truck
driver in 1994. From January 1, 1994 to May 2, 1994, petitioner
worked for Ortega Trucking (Ortega), the owner of which is
Charles Ortega (Mr. Ortega). Petitioner would drive one of
Ortega’s trucks to Pacific Railroad where he would pick up a
shipment. Petitioner would then transport this shipment to
various warehouses for unloading.
Some of the warehouses to which petitioner delivered had
their own employees help unload the trucks. Other warehouses did
not, and petitioner would hire “lumpers” to help unload. The
lumpers would wait in the vicinity of the warehouse for the
trucks to come in. According to petitioner, he would negotiate a
price with the lumpers and would pay them about $60 or $65 and
sometimes $80. If petitioner needed help unloading a double
2 Petitioners conceded that they received a tax refund of
$2,535 for the 1994 taxable year.
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