- 6 -
“Rental real estate, royalties, partnerships, S corporations,
trusts, etc.” $214,896.40 and $322,484.05 for 1997 and 1998,
respectively. For 1997, the foregoing amount is characterized on
the attached Schedule E, Supplemental Income and Loss, as
nonpassive income from Schedule K-1, and $26,000 is shown on
Schedule C, Profit or Loss From Business, as gross receipts. For
1998, $316,484.05 is shown on Schedule E as nonpassive income
from Schedule K-1; $6,000 is shown on Schedule E and on Form
4831, Rental Income, as rent; and $40,000 is shown on Schedule C
as gross receipts.
The Notice of Determination
Respondent neither audited nor challenged petitioner’s 1991,
1992, or 1993 Federal tax return regarding petitioner’s treatment
of Sadanaga as other than an employee. Prior to the audit
underlying the instant case covering 1997 and 1998, respondent
did audit petitioner for employment tax purposes for 1994, 1995,
and 1996. That audit resulted in litigation of issues similar to
those presented here. This Court issued an opinion thereon, in
favor of respondent, in Veterinary Surgical Consultants, P.C. v.
Commissioner, 117 T.C. 141 (2001), and the Court of Appeals for
the Third Circuit affirmed sub nom. Yeagle Drywall Co. v.
Commissioner, 54 Fed. Appx. 100 (3d Cir. 2002).
During pendency of the prior matter, on June 8, 2001,
respondent sent to petitioner the notice of determination at
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011