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return self-employment income earned by petitioner in his
woodworking activity in addition to the wage and salary income he
earned and correctly reported on the income tax return for 1999.
Petitioner contends that his sole employment during 1999 was
with Bollinger Cabinet Co., and he only worked for that employer
from late April through the remainder of 1999. He contends that
he was not gainfully employed from January 1, 1999, until his
employment with Bollinger Cabinet Co. beginning in late April
1999. A third-party payer, Jerry Brown, filed an information
return with the Internal Revenue Service that reflected
nonemployee compensation payments to petitioner of $8,946 during
the year 1999. This income was not reported on petitioners'
Federal income tax return for 1999; consequently, the notice of
deficiency includes these payments as gross income and allows
petitioners a deduction for one-half of the self-employment tax
thereon. Sec. 164(f).
Petitioners deny that they received any income from Mr.
Brown during 1999. Petitioner contends he was unemployed from
January to late April 1999, when he commenced employment with
Bollinger Cabinet Co. Petitioner, however, admitted that in
years past, beginning in 1997 and in 1998, he performed cabinet
work for Mr. Brown and his wife but denied that he performed any
services for Mr. Brown during 1999 or received any compensation
from Mr. Brown for past services. For the year 1998, Mr. Brown,
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