John Michael Treu - Page 3

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               Respondent determined a deficiency in petitioner’s 1999                
          Federal income tax, an addition to tax under section 6651(a)(1),            
          and an accuracy-related penalty under section 6662(a) in the                
          respective amounts of $6,654, $308, and $1,331.  The issues are             
          (1) whether petitioner had unreported income of $35,000; (2)                
          whether petitioner is liable for the accuracy-related penalty               
          under section 6662(a); and (3) whether petitioner is liable for             
          the addition to tax under section 6651(a)(1).  Petitioner resided           
          in Orlando, Florida, at the time the petition was filed.                    
                                     Background                                       
               The facts may be summarized as follows.  In January 1999               
          petitioner associated with his brother in an air conditioning               
          installation and service business.  Petitioner thought that the             
          business was a partnership.  It appears, however, that it was               
          conducted as a corporation under the name of Treu Air, Inc. (Treu           
          Air).  A cousin, Tom Burgess (Mr. Burgess), was also associated             
          with Treu Air.  Treu Air treated petitioner, Mr. Burgess, and               
          petitioner’s brother as independent contractors.  It appears that           
          each individual supplied his own truck and tools, but the                   
          operating expenses of these items were paid by Treu Air.                    
               Petitioner’s brother was in charge of the office and                   
          maintained the company records, such as they were, and Mr.                  
          Burgess and petitioner were engaged in the installation and                 
          service of air conditioners.  The company check register and                






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