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Respondent determined a deficiency in petitioner’s 1997
Federal income tax in the amount of $7,562, and an accuracy-
related penalty under section 6662(a)(1) in the amount of $1,512.
After concessions by petitioner,1 the issues for decision
are: (1) Whether petitioner failed to report $24,000 on his 1997
Federal income tax return; (2) whether petitioner is subject to
the self-employment tax on this amount; and (3) whether
petitioner is liable for an accuracy-related penalty under
section 6662(a).
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time of filing the
petition, petitioner resided in Oro Valley, Arizona.
During 1997, petitioner was a full-time employee of Quality
Screw & Nut Company (QSN) in its Tucson, Arizona, branch.
Petitioner was the general manager of the branch and conducted
regular business in Mexico on behalf of petitioner’s main client,
McCulloch Corporation (McCulloch). McCulloch, based in Tucson,
Arizona, manufactured various power tools including gas and
electric chain saws, string trimmers, and blowers. QSN provided
supplies, including screws and nuts, and logistics management for
1 Petitioner concedes that he failed to include $24 of
taxable interest received from Capital One Federal Savings Bank
and $48 of taxable interest received from DM-Federal Credit Union
in 1997.
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