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because the copy of the 1998 return contained in the record does
not include the first two pages.) For 1996, an attached
Schedule E, Supplemental Income and Loss, characterizes the
foregoing amount as nonpassive income from Schedule K-1. For
1997, $17,052.98 is shown on Schedule E as nonpassive income from
Schedules K-1; $6,000 is shown on Schedule E and on Form 4831,
Rental Income, as rent; and $16,500 is shown on Schedule C,
Profit or Loss From Business, as gross receipts. For 1998,
$4,822.46 is shown on Schedule E as nonpassive income from
Schedules K-1, $6,000 is shown on Schedule E and on Form 4831 as
rent, and $14,000 is shown on Schedule C as gross receipts.
The Notice of Determination
On June 8, 2001, respondent sent to petitioner the notice of
determination at issue in this proceeding. The notice was based
on a determination that Ridge was to be legally classified as an
employee for purposes of Federal employment taxes and that
petitioner was not entitled to relief from such classification
pursuant to Section 530. Enclosed with the notice was a schedule
setting forth petitioner’s liabilities for FICA and FUTA taxes.
In calculating petitioner’s FICA and FUTA liabilities,
respondent concluded that only Ridge (and not Mrs. Ridge)
provided services to petitioner during the years in issue and,
accordingly, limited the computation to amounts distributed to
Ridge. As a result, for each of the years 1996, 1997, and 1998,
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