Forrest Jackson - Page 4




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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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