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determined that petitioner Shari L. Hartz received unreported
wage income of $13,595 in 1996.
Gross income generally includes all income from whatever
source derived, including compensation for services and gross
income derived from business. Sec. 61(a)(1) and (2).
In his trial memorandum, respondent argues as follows with
respect to the unreported income:
Gross receipts of $140,559 were reported for the year
1995 for Hartz Bleachers. Forms 1099-MISC totaling $153,712
were issued to Hartz Bleachers for the year 1995.
Respondent determined that the amount reported on the Forms
1099-MISC accurately reflected gross income for Hartz
Bleachers for * * * 1995.
Gross receipts of [$189,159] were reported for the year
1996 for Hartz Bleachers. Forms 1099-MISC totaling $187,809
were issued to Hartz Bleachers for the year 1996. Books
kept for Hartz Bleachers reported receipts of $227,800.
Bank deposits into accounts held by petitioners and Hartz
Bleachers for the year 1996 totaled $239,234. Respondent
determined that the correct amount of income was [$227,800],
as shown on petitioners’ books and records.
* * * * * * *
For the year 1996, [$13,595] of the amount allowed by
respondent as a deduction for compensation [see discussion
infra] was for amounts Hartz Bleachers paid to petitioner
Shari L. Hartz. Respondent also determined that this amount
should be reported as income by Shari L. Hartz for * * *
1996.
No party presented reliable evidence concerning the correct
amount of wage and business income in 1995 and 1996. Although
petitioner testified briefly concerning the business income, the
extent of his testimony was that he relied upon the Forms 1099 in
calculating the total amount of income in each year. The Forms
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