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portion of the advertising expenses and withheld money from his
paycheck as an “account receivable” for repayment. Mr. Possas’s
annual payroll statement for 1995 reflects an “account
receivable” withheld of $5,156.60. His annual payroll statement
for 1996 indicates an “account receivable” withheld of
$17,821.68. Mr. Possas paid for the remainder of the advertising
expenses separately, without the advanced funds from his
employer.
Petitioner Mary Possas (Mrs. Possas) was a licensed
cosmetologist. She had worked as a hairdresser in a salon before
1995 but started working independently in 1995 as a way to make
friends. She worked either at an area in the kitchen in her home
or at the home of a client. The schedule of approximate charges
for her hairdressing activity was as follows:
Service Approximate Charge
Adult haircut $7 - 10
Child haircut 5
Blow-dry 7
Permanent with haircut 30 - 40
Hair color 20 - 30
Clients paid her either in cash or with a check. Mrs. Possas
usually did not receive tips from her clients.
Mrs. Possas purchased various supplies, such as shampoo,
conditioner, permanent solution, and hair color, at either a
beauty supply store or at another store. She maintained a supply
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