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residence monthly payments that petitioners claimed in Schedule E
as rent with respect to the Loomis residence constitutes self-
employment earnings and not rental income. Consequently, respon-
dent increased petitioners’ Schedule C gross receipts by an
additional $5,100.
OPINION
Petitioners bear the burden of proving that the determina-
tions in the notice are erroneous. See Rule 142(a);12 Welch v.
Helvering, 290 U.S. 111, 115 (1933).
Constructive Receipt Issue
Respondent determined in the notice that Mr. Palmer construc-
tively received during 1995 $95,935 of nonemployee compensation
from Olin Ordnance with respect to his approved monthly invoices
0011 through 0016 covering the period from February 6, 1995, to
11(...continued)
dent determined that Mr. Palmer had constructively received that
amount during 1995 equals the total of (1) the aggregate amount
of nonemployee compensation that Olin Ordnance owed to Mr. Palmer
during 1995 with respect to his approved monthly invoices 0011,
0012, 0013, 0014, 0015 and (2) the approximate portion of the
amount of nonemployee compensation that Olin Ordnance owed to him
during that year with respect to his approved monthly invoice
0016 covering the period from July 3, 1995, to the execution of
the July 1995 amendment. For convenience, we shall ignore the
fact that respondent approximated the portion of the amount of
nonemployee compensation that Olin Ordnance owed to Mr. Palmer
during 1995 with respect to his approved monthly invoice 0016
covering the period from July 3, 1995, to the execution of the
July 1995 amendment.
12All Rule references are to the Tax Court Rules of Practice
and Procedure. All section references are to the Internal
Revenue Code in effect for the year at issue.
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