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The 1099 that I received from Mr. Vaughan was a
bonus for that year. As your records indicate, I was
an employee of Mr. Vaughan for several years prior to
this time. I realize that the 1099 may have been
completed with the notation as non-employee
compensation, but that would have been an error on the
part of Mr. Vaughan, and not my error. Mr. Vaughan
stated to me that the taxes were taken care of. I do
not feel that I should be held responsible for errors
committed by Mr. Vaughan. I realize that Mr. Vaughan
is now deceased, and I believe that the reason that the
IRS is attempting to get this from me since [sic] they
cannot get it from him.
On December 15, 1998, petitioner responded to proposed
changes by the Internal Revenue Service and stated that:
as I have explained, the bonus was employee compensation,
regardless of how it was reported to your office. As I have
explained to your office on several occasions, this income
was a bonus from my employer and he informed me that he
would be taking care of the taxes. * * * I do know that my
records for 1995 will reflect that I received a bonus that
year and that bonus reflected the pay was for employee
compensation.
Respondent determined that the $10,638 should be included in
petitioner's income. The notice of deficiency contains the
following statement: “A bonus is considered taxable income and
must be included on the tax return. It is not subject to self-
employment taxes nor FICA taxes. We have deleted the self-
employment tax and your share of the FICA tax."
Petitioner stated in his petition that he disagreed with the
adjustments in the notice of deficiency because the $10,638 "was
erroneously marked on 1099 as non-employee compensation when it
should have been marked as employee compensation."
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