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tax. After concessions,2 the issues are whether petitioner is
liable for the tax on $4,403 of unreported income and the
accuracy-related penalty under section 6662(a). Petitioner
resided in Orlando, Florida, at the time the petition was filed.
Background
Petitioner was employed with Sparks-Piper Exhibits &
Environments, Inc. (Sparks-Piper) until September of 1999 when he
started employment with Czarnowski Display Services, Inc.
(Czarnowski). Petitioner remained an employee of Czarnowski for
the remainder of the 1999 taxable year. Petitioner purchased
various business items for Czarnowski, and was reimbursed for
those amounts. During 1999, Czarnowski issued 14 payments to
petitioner: 10 payments of $1,500 each and the remaining four
payments were in the amounts of $4,600, $2,500, $2,838.18, and
$1,875.95.
Sparks-Piper reported petitioner’s wages of $51,217 on Form
W-2, Wage and Tax Statement. Czarnowski reported nonemployee
compensation paid to petitioner of $26,814 on Form 1099-MISC,
2 In the notice of deficiency, respondent asserts that
petitioner received, but did not report, $26,814 of nonemployee
compensation and $550 of unemployment compensation. Petitioner
concedes that he is liable for the tax on $17,214 of
compensation, and the parties concede that petitioner is liable
for the tax on $100 of unemployment compensation. Respondent
concedes that petitioner was an employee of Czarnowski, and of
the $26,814 petitioner received, $5,197 represents reimbursement
for employee business expenses. Thus, the amount of compensation
in dispute is $4,403.
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