- 5 - petitioner was liable for an accuracy-related penalty due to a substantial understatement of tax under section 6662(a) and (d)(1). Petitioner contends that he should not have to pay self- employment tax since the $24,000 received was not commission income, but rather reimbursements of other business expenses. We note that petitioner incorrectly reported the $4,800 car allowance as gross receipts on his Schedule C. Similarly, petitioner deducted car/truck expenses of $10,395 on his Schedule C, resulting in a net loss from business of $5,595. We find that these amounts should be reported on petitioner’s Schedule A, Itemized Deductions, as an unreimbursed job expense subject to the 2-percent floor of section 67. By use of Form 2106, Employee Business Expenses, we recharacterize the correct amount reported on line 20 of petitioner’s Schedule A as follows: Vehicle Expenses $10,395 Less: Reimbursements received from employer 4,800 Net unreimbursed employee expenses $5,595 Respondent’s determination is presumed correct, and petitioner bears the burden of proving that respondent’s determination is erroneous. Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).2 2 Because petitioner failed to introduce any credible evidence, he failed to meet the requirements of sec. 7491(a), as amended, so as to place the burden of proof on respondent with respect to any factual issue relevant to ascertaining liability for the tax deficiency in issue. As to the accuracy-related (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011