Marcus V. and Polly A. Booker - Page 15

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          Bell worked for him part time passing out brochures and bringing            
          in referrals throughout 1999 and 2000.  Petitioners offered into            
          evidence copies of a completed Form 1096 for both 1999 and 2000             
          that listed nonemployee compensation to Mr. Bell of $4,000 for              
          1999 and $4,800 for 2000.                                                   
               Respondent disallowed deductions for the amounts Mr. Booker            
          claimed to have paid Mr. Bell because the Social Security                   
          Administration, with which Forms 1096 would have been filed, has            
          no information on record of such payments to Mr. Bell for the               
          years 1999 and 2000.  Moreover, respondent averred that the                 
          records of the Social Security Administration show that the                 
          Social Security number listed as belonging to Mr. Bell does not             
          exist.  Also, although the Social Security Administration had a             
          record of all other employees for whose wages petitioners claimed           
          deductions for 1999 and 2000, it had no record of a Form 1099               
          being issued by petitioners to Roy C. Bell or to a person of                
          another name with the Social Security number petitioners listed             

          was entitled to as an additional wage expense deduction actually            
          pertained to another employee, Eric S. Williams.  Mr. Booker                
          stated that he forgot to deduct wages paid to Mr. Williams during           
          1999 on his 1999 income tax return.  The copy of the Form 1096              
          for 1999 petitioner admitted into evidence listed both Mr. Bell             
          and Mr. Williams as wage earners during 1999.  In conceding the             
          entire $13,300 wage deduction for 1999, respondent stated the               
          intention to allow a deduction for wages paid to Mr. Williams               
          while disallowing any wage expense deduction pertaining to Mr.              
          Bell.  Therefore, respondent also conceded at trial an additional           
          $525 deduction as a wage expense, leaving only $4,000 of the                
          additional $4,525 petitioners sought to deduct for 1999 in                  

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