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records to account for the income from those activities in those
years.
Petitioner admitted receiving $37,800 from Johnson Controls,
Inc., in 1995 as well as a 1995 Form 1099-MISC, Miscellaneous
Income, reporting that amount from that source. Petitioner
reported only $8,803 of gross receipts in his Schedules C, Profit
or Loss From Business, for his construction business and $2,651
for his antiques business in 1995. Petitioner offered three
different explanations to respondent’s examiner concerning why he
did not report the $37,800 shown on the foregoing Form 1099-MISC:
(i) That he had not received the Form 1099-MISC in time to
include the amount thereon in his 1995 return;9 (ii) that the
amounts reported on the 1995 Schedule C for his construction
business were net amounts; i.e., receipts less expenses; and
(iii) that when he thought about his truck payment, he “decided
to keep it.”
In response to the examining agent’s inquiries seeking to
identify nontaxable sources of income during 1995 and 1996,
petitioner claimed he received a $10,000 gift from his mother but
did not substantiate it. Petitioner also claimed that during
1995 and 1996 he collected rent receipts of approximately $11,700
annually on his mother’s behalf from two rental properties that
9 We note in this regard that petitioner’s 1995 return was
filed on Oct. 21, 1996.
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