Randal W. Howard - Page 3




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          have found that petitioner’s “labor” income was taxable wage                
          income.  Petitioner’s position in the instant case, as presented            
          in his petition and during trial, is essentially unchanged.                 
               During 1996, petitioner was an engineer for a radio station,           
          FLBS, in Tucson, Arizona.  He has been a full-time employee with            
          FLBS since 1994.  Prior to 1994 petitioner was an independent               
          contractor of FLBS.  During the year in issue petitioner received           
          health insurance, paid vacation and sick leave, and other                   
          benefits from FLBS.  FLBS provides these benefits only to its               
          employees and not to its independent contractors.  On December              
          29, 1993, as a requirement of his employment, petitioner signed a           
          Form W-4, Employee’s Withholding Allowance Certificate.  On the             
          Form W-4, petitioner claimed nine exemptions.2  Petitioner has              
          not signed any other Form W-4 since December 29, 1993.                      



          2    At trial, the following exchange took place between                    
          respondent and petitioner:                                                  
               Q:   * * * How many . . . allowances did you claim in -- on            
                    that W-4 form?                                                    
               A:   Nine.                                                             
               Q:   Are you married, Mr. Howard?                                      
               A:   No.                                                               
               Q:   Do you have nine -- or eight children living with you?            
               A:   No.  That’s not how that works.                                   
                    *    *    *    *    *    *                                        
               Q:   The W-4 they had you sign was in order to withhold                
                    taxes from you; isn’t that true?                                  
               A:   Presumably.                                                       
               Q:   And did they --                                                   
               A:   Because they believed I needed to.                                
               Q:   Did they withhold taxes from you in 1996?                         
               A:   Uh-huh.                                                           





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