Steve Gerald Huisenfeldt - Page 8

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          taxable year 2000, petitioner did not maintain a tip diary or               
          other log.                                                                  
               Petitioner electronically filed a Form 1040EZ, Income Tax              
          Return for Single and Joint Filers With No Dependents, for                  
          taxable year 2000.  On March 30, 2002, petitioner filed a Form              
          1040X, Amended U.S. Individual Income Tax Return, for taxable               
          year 2000.  On his Form 1040X petitioner claimed an additional              
          capital loss and itemized his deductions.  These changes, which             
          have been accepted by respondent, reduced the amount of tax shown           
          by petitioner on the return.  Petitioner did not declare any room           
          service tips to the Hilton during taxable year 2000.  Also,                 
          petitioner did not report additional tips, above the $784 of                
          tips, previously discussed, on either his Form 1040EZ or his Form           
               In the notice of deficiency,2 respondent determined that               
          petitioner failed to report tip income of $17,046, which was                
          computed by multiplying petitioner’s hours worked, 1,919.6, by a            
          rate of $8.88 per hour.  At trial, however, respondent stated               
          that it would be more appropriate to compute petitioner’s tip               
          income for taxable year 2000 on the same basis as the room                  
          service food servers who participated in the Tax Compliance                 

          2The notice of deficiency failed to take into account the                   
          additional capital loss, itemized deductions, and reduced tax as            
          reported on petitioner’s Form 1040X.  Respondent concedes that              
          when any deficiency is computed, the computation should take into           
          account these adjusted amounts.                                             

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