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attached a corresponding Form W-2, Wage and Tax Statement.
Petitioner received a refund of $1,041 for 1998.
1. Nonemployee Compensation
Respondent received a Form 1099-MISC, Miscellaneous Income,
from San Antonio Kitchens and Baths, Inc. (SAKB), reporting that
$18,774 in nonemployee compensation had been paid to petitioner.
The Form 1099-MISC bears a Social Security number that does not
belong to petitioner. Additionally, the envelope in which the
Form 1099-MISC was mailed bears the United States Postal Service
Stamp “Returned to Sender - Insufficient Address”.
Respondent obtained copies of the Form 1099-MISC and copies
of checks from SAKB payable to petitioner. The checks bear
endorsements which appear to be petitioner’s signature.
Respondent issued a notice of deficiency on January 10,
2001, determining that petitioner had unreported income from
services rendered to SAKB in the amount of $18,774, and asserting
an accuracy-related penalty under section 6662(a) and (b)(2) in
the amount of $1,099. Petitioner timely filed a petition with
this Court.
Prior to trial, petitioner told respondent that she did not
perform any services for SAKB, nor did she receive any
compensation from them. She advised respondent that Mr. James
Fullen, with whom petitioner lives, performed services for SAKB,
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