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in the form of a business check upon the completion of the job to
cash such payment and divide the cash among the workers.
Petitioner testified that it would be impossible for him to
complete some of the jobs by himself due to the deadlines and the
diverse locations of the jobs, thereby requiring him to engage
the services of other installers.
Petitioner kept “several books” with information of various
payments made to workers. However, he admitted that upon
reviewing the books he could not “make sense of them ... they’re
kind of sporadic”. The books were not brought to trial and are
not a part of the record.
Petitioners filed joint Federal income tax returns for tax
years 1988, 1989, and 1993. The joint returns for tax years 1988
and 1989 were signed by petitioners on March 1, 1997, and stamped
received by the Cincinnati Service Center on June 17, 1997. The
1993 joint return was timely filed.
Petitioner filed separate Federal income tax returns for tax
years 1990, 1991, and 1992. These returns were signed on March
1, 1997, and stamped received by the Cincinnati Service Center on
June 17, 1997.
Respondent disallowed the following Schedule C deductions
and cost of goods sold:
1988 $1,500 Schedule C - Construction Expense - paid to
Joseph Sweeney
1989 20,798 Schedule C - Cost of Goods Sold - paid to
Charles Hoerl
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