Melinda D. Rivera - Page 5

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          90-day probationary period.  The letter also states that                    
          petitioner would be reimbursed at 26 cents per mile for mileage             
          driven and documented.  Peerless required that it be named as an            
          additional insured on petitioner's auto policy and that                     
          petitioner provide them with certificates of insurance on a                 
          regular basis.  Petitioner's monthly insurance billing statements           
          did not reflect Peerless as an insured.                                     
               The sole adjustment determined in the notice of deficiency             
          is that petitioner is liable for self-employment tax and entitled           
          to the corresponding deduction.  The issues regarding                       
          petitioner's status as a statutory employee and her entitlement             
          to claim deductions on Schedule C were raised in her petition               
          herein and were argued by her at trial.  Respondent did not file            
          an answer, and his argument that petitioner is not entitled to              
          deduct business expenses on either Schedule C or Schedule A                 
          because of lack of substantiation was raised for the first time             
          in his trial memoranda.2                                                    
               The Court finds on the basis of the entire record that                 
          petitioner received adequate notice, and was not surprised or               
          unduly prejudiced by respondent's position.  Accordingly, the               
          Court deems the issues raised and tried by consent of the parties           

               2This case was set for trial twice.  Respondent raised the             
          issue in both trial memoranda.                                              

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Last modified: May 25, 2011