Dennis J. and Carol R. Kraus - Page 4

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          sales of goods delivered to IBC customers.  IBC had the right to            
          discharge petitioner for certain infractions specified in the               
          union agreement.  IBC provided petitioner with paid holidays,               
          vacations, and sick and funeral leave.  In addition, IBC provided           
          petitioner with severance pay benefits and coverage under pension           
          and health benefit plans.  Normally, petitioner’s sales route was           
          based on driver seniority.                                                  
               Petitioner’s compensation from his activity was reported to            
          him and the Government by IBC as wages on a Form W-2, Wage and              
          Tax Statement.  For 1997 and 1998, IBC reported wages of $45,700            
          and $42,940, respectively, to petitioner.  For 1997 and 1998,               
          petitioners deducted $7,965 and $6,443, respectively, for home              
          office expenses.  During the years in issue, one of the bedrooms            
          in petitioner’s home was converted into an office which he used             
          for budget tracking and promotional and other work.  IBC did not            
          require petitioner to maintain an office in his home as a                   
          condition of employment.                                                    
               Respondent concedes that if the Court finds that petitioners           
          are not entitled to home office deductions under section 280A,              
          then petitioners are entitled to the following additional                   
          deductions on Schedules A, Itemized Deductions, for 1997 and                

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