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$48,503, and $86,950, respectively.6 Petitioners included the
nonwage compensation of $1,700 and $1,900 that Ms. Owens received
from Mr. Owens’ painting business during 1993 and 1995, respec-
tively, in calculating the cost of labor claimed in Schedules C
of their respective joint returns for those years. However, Ms.
Owens did not report the respective amounts of such nonwage
compensation in petitioners’ joint returns for 1993 and 1995.
For each of the years at issue, petitioners computed the
gross receipts from Mr. Owens’ painting business that they
reported in Schedule C for each such year by totaling the bank
deposits that they had made during each such year. They provided
the resulting total of those deposits for each of the years at
issue to their tax return preparer (return preparer) for report-
ing in Schedule C of their return for each such year.
For each of the years at issue, petitioners computed the
expenses, with the exception of the Schedule C car and truck
expenses, that they claimed in Schedule C for each such year by
categorizing the checks they had written during each such year
and then totaling each category of expense. They provided the
resulting total for each such category for each of the years at
issue to their return preparer for reporting in Schedule C of
6The amounts of the cost of labor for 1993, 1994, and 1995
that petitioners claimed as part of the claimed Schedule C cost
of goods sold for those years exceed the respective amounts of
labor costs that are reflected in petitioners’ monthly summaries
for those years.
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