Frederick M. and Cheryl A. Prouty - Page 11

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          the return indicate petitioner's status as an employee.  The                
          amounts reported on the forms were not included as wages, and               
          without further explanation it is not apparent what income items            
          are reported on the Schedule C.  A taxpayer's self-serving                  
          declaration is no ironclad substitute for the records that the              
          law requires.  See Weiss v. Commissioner, T.C. Memo. 1999-17; see           
          also Seaboard Commercial Corp. v. Commissioner, 28 T.C. 1034,               
          1051 (1957) (a taxpayer's income tax return is a self-serving               
          declaration that may not be accepted as proof for the deduction             
          or exclusion claimed by the taxpayer); Halle v. Commissioner, 7             
          T.C. 245, 247 (1946) (a taxpayer's return is not self-proving as            
          to the truth of its contents), affd. 175 F.2d 500 (2d Cir. 1949).           
               Petitioner submitted on November 17, 2000, a letter that               
          substantiated her status as a person described in section                   
          3121(d)(3) as to the amount on one of her Forms W-2.  It was not            
          until February 13, 2001, that evidence of her status, a person              
          described in section 3121(d)(3), with respect to the Sullivan               
          Broadcasting3 was supplied to the Commissioner.  Respondent must            
          then have concluded that the amounts reported on petitioner's               
          Schedule C include the amounts reported on the Forms W-2.  The              
          notice conceding the business expense issue related to her                  
          employment status was sent to petitioners less than a month                 

               3See supra note 1.                                                     

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