Peter F. & Maureen L. Speltz - Page 6

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          for Self-Employed Individuals,” dated March 29, 1999, and Rev.              
          Rul. 71-588, 1971-2 C.B. 91, in setting up the plan.4 Each                  
          document permits, under certain circumstances, a sole-proprietor            
          employer-spouse to deduct medical benefits provided to an                   
          employee-spouse, and the employee-spouse to exclude those same              
          benefits from his or her gross income.                                      
          Mr. Speltz                                                                  
               Mr. Speltz has provided childcare services (and other                  
          general services) for the daycare since 2000 and has been                   
          reimbursed under the daycare’s accident and health plan for a               
          limited amount of medical care expenses and insurance premiums as           
          compensation for his services.                                              
               Mr. Speltz also worked full time during the years at issue             
          as a machinist for Fastenal Company, Inc. (Fastenal).  Mr.                  
          Speltz’s hours at Fastenal were from approximately 6 a.m. until             
          approximately 2:15 p.m.  Mr. Speltz had medical and dental                  
          insurance through Fastenal.  Mr. Speltz’s spouse and dependents             
          were eligible to receive benefits.  Mr. Speltz also had a snow              
          removal and lawncare service during 2000 and 2001.                          
               Mr. Speltz began working for the daycare when he returned              
          home from his full-time job on weekdays, around 2:30 p.m., and he           

               4Internal Revenue Service Coordinated Issue Papers and                 
          Revenue Rulings are generally not entitled to deference in this             
          Court.  See Lunsford v. Commissioner, 117 T.C. 159, 182 (2001);             
          see also N. Ind. Pub. Serv. Co. v. Commissioner, 105 T.C. 341,              
          350 (1995), affd. 115 F.3d 506 (7th Cir. 1997).                             

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