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additional facts to support this conclusion, including the fact
that petitioner compensated Mr. and Mrs. Evans through the
payment of commissions, personal expenses, and other wages
disguised as shareholder loans. Respondent also alleged the tax
period, type of tax, amounts of employment taxes, amounts of
additions to tax, and the amounts of penalties petitioner was
liable for regarding the alleged wages paid to Mr. and Mrs.
Evans.
On July 16, 2001, petitioner filed a Motion to Strike
Paragraphs 9 and 10 of the Answer to Second Amended Petition
(motion to strike).3 On July 31, 2001, respondent filed an
Objection to Petitioner’s Motion to Strike. On August 20, 2001,
petitioner filed a reply.
On October 31, 2001, the Court held a hearing on the motion
to strike. At the hearing, respondent conceded that he has the
burden of proof regarding the classification of Mr. and Mrs.
Evans as employees and the compensation of Mr. and Mrs. Evans
through the payment of commissions and other wages disguised as
shareholder loans.
At the hearing, the issue arose regarding whether, pursuant
to section 7436, the Court had jurisdiction over additional
3 Pars. 9 and 10 of the second answer contain respondent’s
affirmative allegations regarding Mr. and Mrs. Evans’
classification as employees, the compensation of Mr. and Mrs.
Evans through disguised loans, and petitioner’s liability for
additional tax, additions to tax, and penalties.
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