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from petitioner’s 1993 compensation from FLBS.
Petitioner’s work status at FLBS changed from independent
contractor to employee at the beginning of 1994, and he remained
an employee through 1995. On December 28, 1993, petitioner
signed a Form W-4, Employee’s Withholding Allowance Certificate,
on which he claimed nine withholding allowances. As an employee,
petitioner received life, health, and disability insurance
coverage. FLBS paid wages to petitioner during 1994 and 1995 in
the amounts of $31,655.02 and $32,569.95, respectively.
FLBS filed a 1994 Form W-2, Wage and Tax Statement,
reflecting $31,655.02 in wages paid to petitioner and $1,054.55
withheld for Federal income taxes. FLBS filed a 1995 Form W-2
reflecting $32,569.95 in wages paid to petitioner and $1,120.59
withheld for Federal income taxes. Except for the amounts
withheld from his wages, petitioner did not pay any Federal
income tax for the years 1994 and 1995. Petitioner did not file
Federal income tax returns for the years 1994 and 1995.
Based on the Form 1040 submitted by petitioner for 1993,
respondent assessed tax of $2,696 and an addition to tax under
section 6651(a)(1) in the amount of $674. This assessment was
erroneous because the unsigned 1993 Form 1040 that petitioner
submitted was not a valid return. On March 6, 1997, respondent
issued a notice of deficiency for the year 1993. In the notice
of deficiency, the previously assessed tax and additions to tax
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