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Our review of the record reveals the following:
(a) During the years at issue, petitioner employed one or
more employees in her law office and maintained a payroll account
through which she paid her employees’ salaries and related
withholdings.
(b) Petitioner did not introduce into evidence at trial all
of her payroll records or her Forms W-2, Wage and Tax Statement,
for the years at issue. Nevertheless, petitioner’s testimony and
other documents establish that petitioner paid salaries,
employment taxes, and employee benefits during each of the years
at issue.
(c) For 1987, petitioner documented expenses characterized
as employee benefit expenses of $1,159.55 (Ex. 38-R, lines 174-
183), six deposits into the payroll account on various dates in
May, November, and December 1987 totaling $3,041.72 (Ex. 38-R,
lines 816-821), and additional salary and daycare payments of
$946.86 in August 1987 (Ex. 38-R, lines 1112-1117), the
deductibility of which respondent has conceded.
(d) For 1988, petitioner documented salary payments of
$15,766.34 (Ex. 39-R, lines 833-865), additional salary payments
of $1,218.52 to Cynthia O. Ransom during May 1988 (Ex. 39-R,
lines 1294-1297), and daycare expenses in April and May 1988 of
$72 (Ex. 39-R, lines 1291-1293), the deductibility of which
respondent has conceded.
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