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Petitioner filed her 2002 return, in which she described her
occupation as “driver”, on or about June 5, 2003. Petitioner
reported the entire amount of her wages from FedEx on a Schedule
C, Profit or Loss From Business, as gross receipts from a business
activity, Packs to Go Business Solutions (Packs to Go), as opposed
to wage income.3 From those “gross receipts” petitioner subtracted
$3,267 as “cost of goods sold” and $33,554 of “expenses”,4 and
reported a “net profit” of $5,534. After further subtracting her
standard deduction and personal exemption, petitioner reported no
taxable income and requested a refund of the $2,616.52 of tax
withheld by FedEx.5
3Petitioner now agrees that the income she received from
FedEx should have been reported as wage income rather than as
gross receipts from a business activity.
4The claimed expenses consisted of $800 for advertising,
$1,750 for bad debts, $9,500 for car and truck expenses, $2,957
for depreciation, $697 for automobile insurance, $500 for legal
and professional services, $1,050 for office expenses, $600 for
rent or lease of vehicles, machinery, and equipment, $10,680 for
rent or lease of other business property, $220 for repairs and
maintenance, $410 for supplies, $50 for taxes and licenses,
$1,339 for travel, $280 for meals and entertainment, $1,401 for
utilities, $945 for wages, and $375 for other expenses described
as “petty cash, tolls, vendor cash, promotional items.”
5Petitioner filed a return for 2001 that was similar to the
2002 return. On Schedule C of that return, petitioner reported
her $31,709 of wages from FedEx as gross receipts from a business
activity and claimed deductions for expenses from the Packs to Go
activity. For 2001, petitioner claimed a net loss of $761.
Petitioner also filed a return for 2003, in which she reported
her $45,000 of wages from FedEx as wage income and by means of a
Schedule C claimed a $37,874 loss from the Packs to Go activity.
Petitioner did not report any receipts from her Packs to Go
(continued...)
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