Robert J. & Shari L. Hartz - Page 5




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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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