Edward Charles Jones - Page 9

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               No one from Techmatics or its successor, Anteon Corp.,                 
          testified at trial.  However, the personnel file of petitioner              
          was obtained from Anteon through a subpoena duces tecum and                 
          jointly submitted into evidence.  In addition to the employment             
          agreement and various correspondence, the records included Salary           
          Review Worksheets periodically prepared by Techmatics personnel             
          regarding petitioner.  These reviews reflected ratings in which             
          petitioner met or exceeded expectations.  The 1998 review                   
          increased petitioner’s compensation from $50 to $52 per hour.               
          The records support petitioner’s assertion that he worked at home           
          but do not show whether Techmatics would have provided petitioner           
          with office space had he requested it.                                      
               The compensation petitioner received from Techmatics during            
          1998 totaled $26,516, which was reflected on Form W-2.  That                
          income was reported by petitioner on his 1998 Federal income tax            
          return as wage and salary income.  However, petitioner also                 
          included with his 1998 return a Schedule C in which he claimed as           
          deductions the expenses incurred in connection with his activity            
          with Techmatics.  The expenses totaled $13,480.  No gross                   
          receipts were reported on Schedule C; however, a notation on the            
          income portion of Schedule C included the statement “See attached           
          –- W-2 -– Techmatics.”  Thus, the Schedule C reported a net loss            
          of $13,480; consequently, there was no computation of self-                 

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