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acquaintance for names of potential customers held to be
compensation).
Petitioner has not established that he is entitled to a
deduction for compensation pursuant to section 162(a)(1) for any
of the purchases of personal items made by Ms. Novak-O’Farrell.
2. Reduced Rent Paid by Ms. Novak-O’Farrell
Petitioner argues that the amount of rent Ms. Novak-
O’Farrell did not pay during 1999 (approximately $450 to $475 per
month) was compensation to her. We disagree.
Petitioner and Ms. Novak-O’Farrell were friends when she
rented petitioner’s house. Petitioner permitted her to pay less
rent in 1999 because she injured herself and could not work.5
Other than his self-serving testimony, petitioner presented no
evidence to show that he forgave the additional rent owed with an
intent to compensate Ms. Novak-O’Farrell. Petitioner issued no
Form W-2 to Ms. Novak-O’Farrell for this alleged additional
compensation. Additionally, petitioner wrote a letter to Ms.
Novak-O’Farrell, which he submitted as evidence in this case,
which indicates that he seeks to collect the rent that she
previously did not pay.
Petitioner has not established that he is entitled to a
deduction for compensation pursuant to section 162(a)(1) for Ms.
Novak-O’Farrell’s reduced rent.
5 Ms. Novak-O’Farrell’s injury was not incurred at work.
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