Aric Manley Allman - Page 5

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          received from his employment with AquaProof.  Petitioner did not            
          report any income derived from his employment with Mr. McMickle.            
               Mr. McMickle reported to the Internal Revenue Service on a             
          Form 1099-MISC, Miscellaneous Income, that petitioner received              
          nonemployee compensation in 2003 of $3,497.  For the 2003 taxable           
          year, Nationwide Life Insurance Company (Nationwide) also                   
          reported on a Form 1099-INT, Interest Income, that petitioner               
          received interest of $16 and $11.  Petitioner did not report                
          these amounts on his Form 1040EZ for 2003.                                  
          1.  Income from Nationwide Life Insurance Co.                               
               Gross income includes all income from whatever source                  
          derived unless excluded by a specific provision of section 61(a).           
          Notably, gross income includes interest and dividends.  Sec.                
               Generally, the taxpayer bears the burden of proving the                
          Commissioner’s determination is erroneous.  Sec. 7491(a); Rule              
          142(a); Welch v. Helvering, 290 U.S. 111 (1933). The issue we               
          must resolve in this case is whether respondent may rely solely             
          upon information provided by a third-party payer in making a                
               Respondent determined that petitioner received interest of             
          $16 and $11 in taxable year 2003 from two separate insurance                
          policies based solely on the information contained on Forms 1099-           

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