T.C. Sum m ary Opi ni on 20 15 -5 9

UNITED STAT ES TAX COURT MILLION HUSSEIN, Pet it io ne r v. COMM ISSI ONER OF INTERNAL REVENUE, Resp on de nt

Doc ke t No . 21 39 4- 13 S. Fi le d S ep te m be r 29 , 20 15 .
Mi ll io n Hu ss ei n, p ro se. Mi ch ael S. Hens le y , forres po nd en t.

SUMM ARY OPINION CHIECHI, J ud ge : Th is cas e was he ardpu rs ua ntto th e p ro vi si on s o f se ct io n 74 63 of t he Int ern al Rev enue Co de ineffec t wh enth e p et it io n was fil ed . Purs u- 1

Herei na fte r, al l s ect io n re fere nc es are t o the Int ern al Rev enue Co de in 1 effe ctforth e y ear a t i ss ue . All R ul e refe ren ces are t o t he Tax C ou rt Rul es of Prac ti ce an d P ro cedur e.-2 -

an t t o s ect io n 7 46 3( b) , th e d eci si on to be en te redis no t re vi ewab le by any ot he r co urt, an d thi s o pi ni on sh al l n otbe tre at edas p rece de ntforan y ot he r cas e. Res po nd en t d et erm in eda de fic ie nc y inpe ti ti on er’s Fed eral in co m e ta x (t ax ) fo r hi s t ax ab le y ear 2 01 1 o f $1 ,57 7. W e m us t d eci de whethe r th e $ 3,8 43 th atpe ti ti on er co nc ed es he rece iv ed du rin g 2 01 1 fr om

th e Heal th & Hum anServ ic es Agen cy of the Co un ty of San Dieg o, Ca li fo rn ia , is in cl ud ib le as n on em pl oyee co m

pe ns at io n i n h is gro ss in co m e fo r hi s t ax ab le y ear 2 01 1. W e h ol d t ha t i t i s. 2 Bac kg ro un d So m e o f th e fac ts ha ve be enst ip ul at edan d a re s o fo un d. Pet it io ne r res id edinCal ifo rn iaat the ti m e h e fi le d the pe ti ti on . Dur in g 2 01 1, p et it io ne r, Mi ll io n Hu ss ei n (M r. Hus se in ), was e m pl oyed b y SDH Serv ic es W es t, LLC (SDH Servi ces ), to pe rfo rm ho us ek eep in g s erv ic es in ho sp it al s an d b y

th e San Dieg o Un ifi edSch oo l Di st ric t t o s erv e fo odto stud en ts at sc ho ol . The re ar e o th er i ss ue s (s el f-em pl oym en t t ax is su es ) fo r pe ti ti on er’s t ax ab le 2 y ear 2 01 1, n am el y , whethe r pe ti ti on er i s l iabl e fo r, an d e nt it le d t o ade du ct io n i n pa rt f or , in crea se d s el f-em

pl oym en t t ax att rib ut ab le to th e $ 3,8 43 th atpe ti ti on er co nc ed es he rece iv edan d tha t re sp on de ntcla im s i s n on em pl oyee co m

pe ns at io n fo r th aty ear. Re so lu ti on of t he sel f-em pl oym en t t ax is su es is co m pu tati on al inth at ou r res ol vi ng whet he r th at$3 ,84 3 i s i nc lu di bl e as no ne m pl oyee co m

pe ns at io n i n pe ti ti on er’s g ro ss in co m e fo r hi s t ax ab le y ear 2 01 1 wi ll res ol ve th os e is su es .-3 -

In20 11 , Mr. Hus se in subm it te d a n app li cat io n t o t he Heal th& Hum an Serv ic es Agen cy

of the Co un ty of SanDieg o, Ca li fo rn ia(SanDieg o Hea lth & Hum anServ ic es ), fo r a fam il y ch il d c are h om e li cen se , whi chth atag en cy ap pr ov ed . Dur in g 2 01 1, M r. Hus se in work edas acare ta ke r fo r certa in ch il dr en . His care taki ng res po ns ib il it ie s fo r th os e ch il dr enin cl ud edtrans po rti ng th e ch il dr ento an d fr om sch oo l an d e nt ert ai ni ng th em aft er s ch oo l. Dur in g the su m

m er o f 20 11 , Mr. Hus se in rece iv eda ch eckfor$3 ,84 3 fr om SanDieg o Hea lth & Hum anServ ic es forhi s ca ret ak in g a ct iv it ie s. SDH Serv ic es is su edto Mr. Hu ss ei n F orm W -2 , W ag e an d Tax Sta te m en t (Fo rm W -2 ), fo r hi s t ax ab le y ear 2 01 1 t ha t s ho wed$2 0,1 17 of wa ge in co m e. The SanDieg o Un ifi edSch oo l Di st ric t i ss ue d t o M r. Hus se inFo rm W -2 for hi s t ax ab le y ear 2 01 1 tha t s ho wed$1 ,29 4 o f wag e in co m e. (W e sh al l re fer c ol le ct iv el y to th e res pe ct iv e am ou nt s o f wag e in co m e sh own inth e res pe ct iv e Fo rm s W-2 tha t SDH Serv ic es an d the SanDieg o Un ifi edSch oo l Di stric t i ss ue d t o M r. Hus se in forhi s ta xabl e y ear 2 01 1 a s Fo rm W -2 wage s.) Mr. Hu ss ei n fi le d F orm

10 40 , U.S. Ind iv idua l In co m e Tax Return, fo r hi s ta xabl e y ear 2 01 1 (2 01 1 re tu rn ). In t ha t re tu rn , Mr. Hus se in rep orte d t he Fo rm W -2 wage s. Mr . Hus se in di d n otrep ort i n h is 20 11 return t he $3 ,84 3 t ha t h e-4 -

rece iv eddu rin g 2 01 1 fo r hi s ca ret ak in g a ct iv it ie s fr om SanDieg o Hea lth & Hum anServ ic es . Res po nd en t i ss ue d ano ti ce o f de fic ie nc y (no ti ce) t o M r. Hus se inforhi s ta xabl e y ear 2 01 1. Inth atno ti ce, res po nd en t d et erm in ed , in te r al ia , th atMr. Hus se in ha d fa il edto in cl ud e in hi s g ro ss in co m e $ 3,8 43 of n on em pl oyee co m

pe nsa ti on he ha d re cei ve d dur in g h is tax ab le y ear 2 01 1. Dis cu ss io n Mr. Hu ss ei n b ears th e b ur de n o f es tabl is hi ng th atth e d et erm in at io ns inth e no ti ce ar e wro ng . See Ru le 14 2( a); W el chv. Hel ve rin g, 2 90 U.S. 11 1, 1 15 (19 33 ). Inpa rag rap h 1 2 o f th e st ip ul at io n o f fac ts th atMr. Hu ss ei n andres po nd en t si gn edm or e th anth ree m on th s b efo re the tri al inth is cas e, th ey st ip ul at ed :

“ Dur in g the 20 11 tax y ear, p et it io ne r rece iv ed$3 ,84 3.0 0 o f no ne m pl oyee co m pe ns at io n fr om

th e Co un ty of SanDieg o Hea lth & Hum anServ ic es Agen cy * * * in co nn ect io n wi th hi s ca ret ak in g a ct iv it ie s.” Sh ortl y be fo re the Co urt’s tria l se ss io n i n S anDieg o, Ca li fo rn ia , comm en cedonFeb ru ary 2, 2 01 5, M r. Hus se in si gn eda de ci si on do cu m en t tha t re sp on de ntha d p rep aredrefl ect in g, i nt er al ia , th at pa rag rap h o f th e p art ie s’ st ip ul at io n o f fact s. Sev eral da y s the reaf te r, bu t b efo re th attri al ses si on ha d b eg un , Mr. Hus se in in fo rm edres po nd en t’s co un se l tha t h e wan te d t o h av e a tria l.-5 -

W e m us t d eci de whethe r th e $ 3,8 43 th atpe ti ti on er co nc ed es he rece iv ed du rin g 2 01 1 fr om

SanDieg o Hea lth & Hum anServ ic es forcert ai n c aret ak in g act iv it ie s i s i nc lu di bl e as no ne m pl oyee co m

pe ns at io n i n h is gro ss in co m e fo r hi s ta xabl e y ear 2 01 1. Be fo re turni ng to ou r co ns id erat io n o f th atis su e, we no te th at we fo un d the tes ti m on y

of M r. Hus se in , th e o nl y witne ss at t ria l, t o b e incert ai n m at eri al res pe ct s v ag ue , con fu si ng , and/o r di ffi cu ltto co m pr eh en d. At tria l, re sp on de nt ’s cou ns el ga ve pe ti ti on er a co py of th e st ip ul at io n o f fact s tha t the parti es ha d s ig ne d andth atwe ha d m ad e p artof t he reco rdat t he be gi nn in g o f tr ia l. Res po nd en t’s co un se l d ire ct edpe ti ti on er t o p arag rap h 1 2 o f th atst ip ul at io n i n wh ic h the parti es ha d s ti pu late d t ha t “ [d ]urin g t he 20 11 tax y ear, pe ti ti on er re cei ve d $ 3,8 43 .00 of n on em pl oyee co m

pe ns at io n fr om

th e Co un ty of SanDieg o Hea lth & Hum anServ ic es Agen cy * * * i n c on ne ct io n wi th hi s care taki ng act iv it ie s.” R es po nd en t’s co un se l the n a sk edMr. Hu ss ei n wh ethe r th at st ip ul at edpa rag rap h was “ a true st at em en t” . Peti ti on er re pl ie d: “ Yes , tru e st at em en t. I rec ei ve .” Pet it io ne r pr es en te d n o e vi de nc e an d m ad e n o a rg um en t attri al th atlea ds us to co nc lu de th atjus ti ce re qu ire s tha t p arag rap h 1 2 o f th e p art ie s’ st ip ul at io n o f fact s b e d eem edstric ke n fr om th atst ip ul at io n.-6 -

On the reco rdbe fo re u s, we fi ndth atdurin g 2 01 1 p et it io ne r rec ei ve d $ 3,8 43 of no ne m pl oyee co m

pe ns at io n fr om

th e Co un ty of SanDieg o Hea lth & Hum an Serv ic es Agen cy

inco nn ect io n wi th hi s caret ak in g a ct iv it ie s. Onth atreco rd , we ho ldth atpe ti ti on er i s re qu ire d t o i nc lu de th atno ne m pl oyee co m

pe ns at io n i n h is gr os s i nc om e fo r hi s t ax ab le y ear 2 01 1. 3 To re fle ctth e fo reg oi ng , Deci si on wil l b e en te redfor res po nd en t.

Pet it io ne r pr es en te d n o e vi de nc e an d m ad e n o a rg um en t attri al th athe is 3 en ti tl edto de du ctforhi s t ax ab le y ear 2 01 1 c ert ai n e xp en se s tha t h e p ai d i n carry in g o uthi s ca ret ak in g a ct iv it ie s.