- 3 -- 3 - Mrs. Brown testified that petitioner was paid by cash and by check. Mrs. Brown kept a payment ledger that indicates that the Browns paid petitioner routinely during 1998 for his work. The record contains seven checks that are appropriately shown on the ledger and were endorsed by petitioner. The ledger also contains the initials “LB” by most of the entries made. Mrs. Brown testified that they were petitioner’s initials. The formation of the letters “LB” on the ledger strongly resembles the formation of those letters on the canceled checks that were endorsed by petitioner. In addition, a written agreement for independent contracting services, dated January 2, 1998, was executed by petitioner. Petitioner initially denied receiving any money from the Browns. When confronted with the canceled checks, he reluctantly conceded that he had received those checks. Furthermore, when petitioner was asked what he lived on during 1998, he was totally evasive stating that “I’m not just helpless. I do little ordinary things. I’ve made a dollar bill [sic?].” Those dollars “here and there” were not reported on petitioners’ tax return. In short, we accept the Browns’ (and respondent’s) version of the transactions between petitioner and the Browns. Next, we turn to the question of the penalty. Section 6662(a) provides that, if the section applies, there is imposed a penalty in an amount equal to 20 percent of the portion of thePage: Previous 1 2 3 4 5 Next
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