Richard A. Brunsman - Page 3

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          Miscellaneous Income.  Czarnowski submitted the Form 1099-MISC to           
          respondent; petitioner, however, alleges that he did not receive            
          the Form 1099-MISC.  Petitioner, in preparing his 1999 Federal              
          income tax return, reported the $51,217 of wages from Sparks-               
          Piper, but he failed to report the $26,814 of compensation                  
          received from Czarnowski.                                                   
          Unreported Income                                                           
               Petitioner asserts that he is not liable for the tax on the            
          compensation received from Czarnowski because he did not receive            
          the Form 1099-MISC.  Section 61(a)(1) provides that “gross income           
          means all income from whatever source derived, including * * *              
          Compensation for services”.  Petitioner’s compensation from                 
          Czarnowski falls within this category, regardless whether                   
          petitioner received the Form 1099-MISC.                                     
               Alternatively, petitioner argues that $4,403 of the                    
          compensation represents the sale of assets to Czarnowski.  The              
          amount received less the adjusted bases in the assets would still           
          be income to petitioner.  See secs. 61(a)(3), 1001, 1011.                   
          Petitioner has the burden to establish that he sold assets to               
          Czarnowski and to establish his bases in the assets sold.  See              
          Rule 142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).3              

               3  Sec. 7491(a) does not apply because petitioner failed to            
          maintain adequate records.                                                  

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