Maria E. Magallon - Page 3

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               Respondent determined for 2002 a deficiency in petitioner’s            
          Federal income tax of $5,291 and a section 6662(a) accuracy-                
          related penalty of $922.                                                    
               Petitioner did not contest in the petition or at trial                 
          whether she had unreported taxable interest in 2002.  Therefore,            
          petitioner is deemed to have conceded the issue.  Rule 34(b)(4);            
          see Funk v. Commissioner, 123 T.C. 213, 215 (2004).  The issues             
          for decision are whether petitioner:  (1) Had unreported Schedule           
          C gross receipts for 2002, (2) is entitled to Schedule C                    
          deductions for taxes and licenses expenses, (3) is entitled to              
          claim a dependency exemption for her daughter, MA,1 and (4) is              
          liable for a section 6662(a) accuracy-related penalty.                      
               The stipulation of facts and the exhibits received into                
          evidence are incorporated herein by reference.  At the time the             
          petition in this case was filed, petitioner resided in Stockton,            
          California.  Petitioner is a native speaker of Spanish.  One of             
          her daughters, Gisell Pompa, acted as her interpreter at trial.             
               During 2002, petitioner was self-employed, engaging in                 
          retail sales in a flea market.  Petitioner was also employed by             
          “M&R” in 2002.                                                              
               In 2002, petitioner made a number of trips to a casino                 
          called Jackson Rancheria where she gambled almost exclusively on            

               1The Court will refer to the minor child by her initials.              

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