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decision is whether petitioners received unreported income for
2001.2
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts is incorporated herein by this
reference. Petitioners resided in Los Angeles, California, when
their petition in this case was filed. Petitioners have limited
facility in English, and their testimony was given through an
interpreter.
A. Petitioners’ 2001 Tax Return
Petitioners timely filed a joint Federal income tax return
for 2001. Petitioners reported $14,840 of business income on the
return and listed their respective occupations as self–employed.
Each petitioner also filed a separate Schedule C-EZ, Net Profit
From Business (Sole Proprietorship), with the return. Petitioner
Ramiro Martinez (Mr. Martinez) reported on his Schedule C-EZ that
his principal business or profession was construction and that he
received gross receipts and a net profit of $11,050. Petitioner
Maria Martinez (Mrs. Martinez) reported on her Schedule C-EZ that
2Respondent increased petitioners’ income by the amount of
unreported income he alleges they received, and as a result he
also adjusted petitioners’ self-employment tax, self-employment
tax deduction, and earned income credit. The parties agree that
the resulting adjustments are computational, and they do not
dispute that the adjustments turn on our resolution of the
unreported income issue.
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