- 29 -
F.2d 624, 627 n.6 (7th Cir. 1989), affg. T.C. Memo. 1987-295;
Hawkins v. Commissioner, 713 F.2d 347, 351-352 (8th Cir. 1983),
affg. T.C. Memo. 1982-451; Thomas v. Commissioner, 92 T.C. 206,
226-227 (1989); Union Equity Coop. Exch. v. Commissioner, 58 T.C.
397, 408 (1972), affd. 481 F.2d 812 (10th Cir. 1973).
On the basis of the foregoing, we hold that petitioners have
not shown that Mrs. Haeder was an employee of petitioner for the
years in issue. Consequently, we need not address the question
of whether payments made on her behalf during the years were
reasonable in amount. Because petitioners have not established
that Mrs. Haeder was petitioner’s employee during the years in
issue, they have failed to prove that the payments made to her or
on her behalf are allowable wage expenses on the Schedules C for
the years in issue or that payments made pursuant to the
purported employee medical expense plan are deductible on the
Schedules C for those years. Additionally, they have not
established that Mrs. Haeder is entitled to deduct contributions
to her IRA account for those years.10 Accordingly, we sustain
respondent’s determinations as to those issues.
10Respondent has determined that petitioners’ income for the
years in issue should be reduced by the wages allegedly paid to
Mrs. Haeder. We agree that respondent’s determination is
appropriate.
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