- 5 - income reported on Forms W-2 in the amount of $179,578 and other “talent fees” in the amount of $9,595. Although petitioner testified that he performed jobs for “hundreds of different agencies”, he received and filed with his 1994 return only 10 Forms W-2 issued from the agencies and in some cases directly from the hiring companies. Petitioner claimed 1994 Schedule C business expense deductions in the amount of $65,510.2 On Schedule SE, Self-Employment Tax, petitioner computed his self- employment tax liability as follows: Gross profit from Schedule C $189,173 (Less expenses) (65,510) Net profit from Schedule C 123,663 (Less “Statutory Wages”)3 (117,391) Reported net profit on Schedule SE $6,272 In a notice of deficiency respondent determined that petitioner was not a qualified performing artist within the meaning of section 62(b)(1). Respondent determined that petitioner was an employee, and recharacterized 94.93 percent of petitioner’s Schedule C business expenses, or $62,187, as job- related Schedule A miscellaneous itemized deductions, subject to the 2-percent limitation under section 67. Based upon the adjustments to Schedule A, respondent determined petitioner’s 2 The substantiation of petitioner’s business expense deductions is not at issue in this case. 3 Petitioner arrived at “Statutory Wages”, or $117,391, by applying the fraction from Forms W-2 income in the amount of $179,578 over the total income reported on Schedule C in the amount of $189,578, which equals 94.93 percent.Page: Previous 1 2 3 4 5 6 7 8 9 Next
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