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the audit and in the proceeding herein, petitioner did not
dispute respondent’s determination that Ms. Odell was
petitioner’s employee in any of the taxable quarters after 1995.
Petitioner did dispute respondent’s determination that Ms. Odell
was petitioner’s employee in 1995 and that petitioner employed
“Other Workers” in 1995 and 1996. Respondent conceded in this
proceeding his determination as to the “Other Workers”.
The Odells reported on their joint 1995 through 1998 Federal
individual income tax returns the following amounts of total
income, rent income, and royalties:
Total income Rent income Royalties
1995 $107,804 $7,200 $42,048
1996 91,912 2,500 34,200
1997 109,920 7,200 150,784
1998 98,329 7,200 46,690
1 Whereas the 1997 Form 1099-MISC, Miscellaneous
Income, that petitioner issued to Ms. Odell reported
that it had paid to her royalties of $51,611, the
record does not explain why the Odells reported this
lower amount.
They recognized (1) the royalties in full and (2) the full amount
of rent less $1,018 of depreciation in 1995, $860 of mortgage
interest in 1996, $794 of depreciation in 1997, and $1,086 of
depreciation in 1998. For 1995 through 1997, petitioner deducted
5(...continued)
income tax returns in October 1997 and began auditing
petitioner’s corporate income tax returns in December 1997.
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