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Petitioner contends that he continuously experienced
difficulties in getting paid for his services for Victory Motors.
He argued that the Form 1099-MISC was “bogus”. These and other
factors undoubtedly prompted petitioner to terminate his
relationship with that dealer. The Court is satisfied from
petitioner’s testimony that, when he left Victory Motors, he
considered the $13,500 in payments as final, and that no other
payments would be forthcoming. It is only reasonable to conclude
that, at the close of 2001, petitioner would receive no
additional payments from Victory Motors, and no attempts, legal
or otherwise, were pursued by him to resume his employment with
that dealer or to collect what he considered to be owing to him.
For all practical purposes, petitioner did not consider the
relationship with Victory Motors as continuing, nor did he have
any reasonable expectation that further payments would be
forthcoming. Moreover, petitioner knew these payments
constituted income and also knew that no income taxes had been
withheld on these payments. Therefore, imposition of the section
6662(a) penalty in this case is justified, and, therefore,
respondent is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
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Last modified: May 25, 2011