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Respondent determined for 1995 a deficiency in petitioners'
Federal income tax of $3,814 and an addition to tax under section
6651(a)(1) of $509. The issues for decision are whether Richard
Newhouse (petitioner): (a) Was an independent contractor
entitled to deductions for business expenses on Schedule C,
Profit or Loss From Business; (b) is entitled to business expense
deductions in excess of those allowed by respondent; and (c)
failed timely to file his Federal income tax return without
reasonable cause.
Background
The stipulation of facts and the accompanying exhibits are
incorporated herein by reference. Petitioners resided in Garden
Grove, California, at the time their petition was filed in this
case.
Petitioner is a professor of geography. He started teaching
at junior colleges on a part-time basis in 1989. In 1995,
petitioner taught at four different junior colleges from each of
which he received a Form W-2, Wage and Tax Statement.
Petitioners reported $9,473 as income earned from his teaching
jobs on Schedule C of their 1995 Federal income tax return. The
Forms W-2 issued to petitioner by the junior colleges and one
issued to him by "Safeway Incorporated" list amounts totaling
only $7,228. Petitioners also included $7,228 of petitioner's
Form W-2 income as wages on line 7 of the U.S. Individual Income
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