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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.
Discussion
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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Last modified: May 25, 2011