William H. Mansel, Jr. and Angela W. Mansel - Page 5

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          1401.  Victory Motors also considered the $13,500 in commissions            
          as self-employment income and issued to petitioner Form 1099-               
          MISC, Miscellaneous Income.  No Federal income taxes or self-               
          employment taxes were withheld by Victory Motors.                           
               At trial, respondent conceded that petitioner was not self-            
          employed but rather was an employee of Victory Motors, a position           
          contrary to the determination in the notice of deficiency and               
          also contrary to how petitioner and Victory Motors viewed their             
          relationship.  Respondent’s position at trial was that petitioner           
          was an employee of Victory Motors, and, as such, the payments               
          constituted wage or salary income.  Respondent did not move to              
          assert an increased deficiency to account for FICA taxes on the             
          payments petitioner received and conceded that the limitations              
          period barred respondent from making an assessment for such                 
               Petitioner contends that the payments of $13,500 he received           
          did not constitute income and were merely advances he received              
          from Victory Motors, subject to adjustment at some point when he            
          and the management at Victory Motors would meet and finally                 
          settle or close the arrangement.  Thus, petitioner contends the             
          $13,500 he received in 2001 was merely an advance and was not               
          income.  However, no evidence was offered to establish that                 
          petitioner and Victory Motors were contemplating any meeting to             
          settle petitioner’s arrangement.  At the time of trial, more than           

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