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needed permission from an IBC supervisor to take a day off. IBC
paid petitioner for vacation and sick days. Petitioner was
required by IBC to wear a uniform. Petitioner punched a
timeclock at the beginning and end of each workday. On Forms W-
2, Wage and Tax Statement, issued by IBC in 1996 and 1997,
petitioner was not listed as a statutory employee.
During the period at issue, petitioners resided in a five-
bedroom house with their children. The house also contained a
living room, kitchen, and bathrooms. Petitioner designated one
of the bedrooms as a home office. The room contained a desk,
telephone, and files. In the home office, petitioner telephoned
bread orders to IBC. Petitioner also designated his two-car
garage as a home office. Petitioner parked his personal van in
the garage. Petitioner maintained bread on racks in the garage
for certain customers. Petitioner also stored tools, bicycles,
and other personal items in the garage.
On his 1996 and 1997 Federal income tax returns, petitioner
indicated that he was a “statutory employee” and, therefore,
entitled to report income and expenses on Schedule C pursuant to
Rev. Rul. 90-93, 1990-2 C.B. 33. The Schedules C included as
gross receipts the amounts reflected on the respective Forms W-2
issued by IBC. Petitioner subtracted $5,914 and $5,544 in 1996
and 1997, respectively, for cost of goods sold for the stale or
damaged bakery goods petitioner returned to IBC. The amounts for
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Last modified: May 25, 2011