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On a second Schedule C petitioner reported the income from
Matheson as $5,778 gross receipts. The nature of the business
was listed as “Trucking - General Freight & Postal” (Schedule C
trucking). Petitioner claimed deductions on this Schedule C as
follows:
Expenses Amount
Advertising $636
Car and truck expenses 2,307
Repairs and maintenance 475
Taxes and licenses 150
Meals and entertainment 756
Total 4,324
The notice of deficiency determined that petitioner was not
entitled to the $22,312 expenses ($18,710 plus the $3,602 of home
office expenses), claimed on the Schedule C pipefitting. No
adjustment was made with respect to the income, except that
respondent allowed petitioner a $299 self-employment tax
deduction. Respondent made no adjustments to the Schedule C
trucking in the notice of deficiency.
In an answer filed with the Court, respondent claims an
increased deficiency and seeks to correct adjustments from the
notice of deficiency. Respondent claims that the gross receipts
reported on the two Schedules C should be treated as salary or
wages. Consistent with this, respondent seeks to reverse the
$299 self-employment tax deduction previously allowed in the
notice of deficiency. Finally, respondent claims that petitioner
is not entitled to the $4,324 Schedule C trucking expenses.
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