Thomas L. & C. Marlene Pias - Page 5

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               I consent to the immediate assessment and collection of any            
               increase in tax and penalties plus interest shown * * *.  I            
               understand that by signing this waiver, I won’t be able to             
               contest these changes in the U.S. Tax Court unless                     
               additional tax is determined to be due for 2001.                       
               Petitioners did not execute the “total agreement statement”;           
          an assessment was made; and collection notices were sent to                 
          petitioners.  On September 13, 2004, the assessment was abated in           
          light of the filing of the petition in this Court.                          
               Subsequently, petitioner contacted the local Appeals officer           
          handling the case and expressed his agreement to the deficiency             
          proposed in the June 1, 2004, letter.  Petitioner was told that             
          his acceptance was not timely.  Nonetheless, petitioner paid the            
          revised deficiency of $5,681 which amount was posted to                     
          petitioners’ 2001 account as an “advance payment of determined              
               Section 61(a) defines gross income to mean all income from             
          whatever source derived.  Gambling winnings, whether reported or            
          not, are includable in gross income.  Paul v. Commissioner, T.C.            
          Memo. 1992-582.  In the case of an individual, section 62(a)                
          defines adjusted gross income as gross income less certain                  
          deductions, including deductions attributable to a trade or                 
          business carried on by the taxpayer.  Sec. 62(a)(1).  If                    
          petitioner’s gambling activity constituted a trade or business,             
          his gambling losses would be deductible from gross income in                

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