Kevin and Bridget Naughton - Page 2




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                                 MEMORANDUM OPINION                                   

               NIMS, Judge:  Respondent determined Federal income tax                 
          deficiencies for petitioners’ 1996 and 1997 taxable years in the            
          amounts of $7,637 and $4,237, respectively.  This case is                   
          presently before the Court on respondent’s motion for summary               
          judgment.  The principal, and to a significant degree                       
          interrelated, issues for decision involve whether petitioner                
          Kevin Naughton was an employee or an independent contractor                 
          during 1996 and 1997 and whether he is entitled to deduct                   
          business expenses claimed on Schedules C, Profit or Loss From               
          Business.  Additional adjustments either have been conceded or              
          are computational in nature.                                                
               Unless otherwise indicated, all section references are to              
          sections of the Internal Revenue Code in effect for the years at            
          issue, and all Rule references are to the Tax Court Rules of                
          Practice and Procedure.                                                     
                                     Background                                       
               Petitioners signed their joint 1996 Form 1040, U.S.                    
          Individual Income Tax Return, on July 29, 1997, and their joint             
          1997 Form 1040 on March 13, 1998.  Both returns were also signed            
          by John E. Judge as preparer and were filed with the Internal               
          Revenue Service.  Attached to each return was a letter stating              
          that Kevin Naughton (petitioner) was a physician                            







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