Kevin and Bridget Naughton - Page 4




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               Thereafter, respondent sent to petitioners a letter in                 
          accordance with Branerton Corp. v. Commissioner, 61 T.C. 691, 692           
          (1974) (Branerton letter), suggesting a conference between the              
          parties and requesting information and documentation in support             
          of the positions taken by petitioners on their return.  With                
          respect to petitioners’ claim that petitioner should be                     
          classified as an independent contractor, respondent identified as           
          possible supporting materials billing records for patients                  
          treated outside of DWP, employment contracts, business licenses,            
          business cards, advertising, yellow pages listings, accounting              
          records, and so forth.  As regards the claimed expenses,                    
          requested items included receipts, invoices, ledgers, journals,             
          etc., showing that the amounts were actually paid or incurred and           
          were ordinary and necessary business expenses.  Respondent in the           
          Branerton letter also conceded certain adjustments reflected for            
          1997 in the notice of deficiency, primarily related to self-                
          employment income and taxes.                                                
               Petitioners neither attended the proposed meeting nor                  
          contacted respondent prior to the suggested date.  A letter from            
          Mr. Judge was apparently thereafter sent to the Internal Revenue            
          Service and indicated that petitioners were in Ireland and were             
          suffering from medical difficulties.  Petitioners did not at that           
          juncture, nor at any time since, produce the corroborating                  
          materials suggested by respondent.                                          






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