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estate activity, she nonetheless devoted significant time and
effort to her Career responsibilities.
The Robinsons were provided with tools and work space by
Career, and both performed their services predominantly for the
company. The Robinsons were regularly involved in the day-to-day
business operations of Career. See Simpson v. Commissioner,
supra. In addition, the Robinsons were integral to the operation
of the company, and together they made fundamental decisions
regarding its operation. See Spicer Accounting, Inc. v. United
States, 918 F.2d at 94. Accordingly, we hold that the Robinsons
were employees of the corporation and not subject to self-
employment tax for their 1992 and 1993 tax years.
III. Accuracy-Related Penalties
Respondent determined accuracy-related penalties for the
substantial understatement of tax under section 6662(b)(2) and
(d) with respect to the Robinsons for years 1992 and 1993, Career
for its fiscal years ending July 31, 1993 and 1994, and Pak West
for its tax year ending September 30, 1994.
For the periods under consideration, petitioners must show
that respondent’s section 6662 determinations are erroneous.
Rule 142(a). Petitioners assert that many of the income and
expense adjustments respondent determined have been reduced by
agreement of the parties. Petitioners also argue that, to the
extent that their corporate records are inadequate, it was
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