Ronald E. Byers - Page 8




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               During the years in issue, petitioner never requested from             
          ECI a Form W-2, and petitioner never objected to ECI’s use of               
          Forms 1099 to report to respondent petitioner’s gross earnings.             
               For 1999 through 2002, petitioner did not make estimated               
          Federal income tax payments to respondent, and petitioner did not           
          file Federal income tax returns.                                            
               On audit, respondent treated petitioner as an independent              
          contractor of ECI, determined petitioner’s income and deductions            
          relating to petitioner’s truck driving activity, and determined             
          petitioner’s taxable income and petitioner’s income and self-               
          employment taxes.                                                           
               In respondent’s determination of petitioner’s income,                  
          respondent utilized the Forms 1099 ECI had submitted, and                   
          respondent allowed business expense deductions for petitioner’s             
          truck lease payments to CCI.  Respondent also analyzed                      
          petitioner’s bank accounts and concluded that significant                   
          additional unexplained funds had been deposited into petitioner’s           
          bank account, which unexplained funds respondent treated as                 
          additional taxable income relating to petitioner’s work for ECI             
          and CCI.  Petitioner’s taxable income as determined by respondent           
          is set forth below:                                                         












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