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less the truck lease payments), amounts far in excess of the
exemption amount.3
Petitioner has not shown that the bank deposits charged to
petitioner by respondent as additional income for the years in
issue represented nontaxable income. See Ellis v. Commissioner,
T.C. Memo. 2007-207. We sustain respondent’s determination of
petitioner’s taxable income for 1999 through 2002, and we
conclude that petitioner was required to file Federal income tax
returns for 1999 through 2002 and to pay Federal income taxes.
Petitioner argues that he was an employee of ECI, that under
section 3402(a)(1) employers are required to withhold Federal
income taxes from employee wages, and that ECI rather than he
should be held liable for payment to respondent of petitioner’s
unpaid Federal income and employment taxes.
However, an employer’s failure to withhold from employee
wages Federal income taxes does not extinguish an individual
taxpayer’s requirement to report income and to pay to respondent
Federal income taxes. See Church v. Commissioner, 810 F.2d 19,
20 (2d Cir. 1987); Latos v. Commissioner, T.C. Memo. 2007-265;
3 At a recent Minnesota Tax Court trial to determine
petitioner’s liability to pay 2000 and 2001 Minnesota income
taxes, petitioner refused to testify under oath and argued that
he had not received from ECI any earnings in 2000 and 2001. The
Minnesota Tax Court found petitioner liable for State income tax
for 2000 and 2001 based on income from petitioner’s truck driving
activity with ECI. See generally Byers v. Commissioner, 2006
WL2380586 (Minn. Tax Reg. Div. Aug. 14, 2006), amended on rehg.
2006 WL3155401 (Minn. Tax Reg. Div. Nov. 2, 2006), and affd. 735
N.W.2d 671 (Minn. 2007).
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