TAX COURT OPINION

Case: Katey Meredith & William P. Harris
Docket Number: 26251-07S
Judge: Colvin
Opinion Type: bench
Filed: 12/09/2008
Pages: 5

UNITED STATES TAX COURT WASHINGTON , DC 2021 7 .Sro ~ Sj j 5 KATEY MEREDITH & WILLIAM P . HARRIS,) Petitioner s v . ) Docket No . 26251-07S . COMMISSIONER OF INTERNAL REVENUE, Respondent O R D E R Pursuant to Rule 152(b), Tax Court Rules of Practice and Procedure, it i s ORDERED that the Clerk of the Court shall transmit herewith to Petitioners Katey Meredith & William P . Harris and to respondent a copy of the pages of the transcript of the hearing in the above case before Chief Special Trial Judge Peter J . Panuthos at Denver, Colorado, on November 18, 2008, containing his oral findings of fact and opinion rendered at the conclusion of the hearing . In accordance with the oral findings of fact and opinion, a decision will be entered under R15- (Signed) Peter J . Panuthos Special Trial Judg e Dated : Washington, D .C . December 9, 2008 SERVED DEC 10 2006 f 2 1 Bench Opinion by Chief Special Trial Judge Peter J . Panuthos 2 Docket No . 26251 - 07S November 18, 200 8 3 THE COURT : The Court has decided to render 4 oral findings of fact and opinion in this case and the 5 following represents the Court's oral findings of fact and 6 opinion . The oral findings of fact and opinion shall not be 7 relied alas precedent in any other case . f~ 8 This case was heard pursuant to the 9 provisions of Section 7463 of the Internal Revenue Code in 10 effect-at the time the petition was filed . Responden t 11 determined a deficiency in Petitioners' federal income tax 12 in the amount of $1,658 for the taxable year 2005 . 13 The issues for decision are whether 14 Petitioner omitted $29 of wage income and whether 15 Petitioners omitted $4,873 or some lesser amount of 16 nonemployee compensation . 17 The Court finds the following facts based 18 upon the stipulation of facts, exhibits in evidence, and 19 testimony of Petitioner Katey Meredith Harris, hereinafter 20 Petitioner . 21 At the time they filed their petition herein, 22 Petitioners were residents of Colorado . During the taxable 23 year 2005 Petitioner worked as an employee and also wa s 24 self-employed as a telemarketer . 25 With respect to the first issue, omitted wage Heritage Reporting Corporatio n (202) 628-4888 1 income, Petitioner conceded at trial that she received an 2 additional $29 of wage income in 2005, as determined b y 3 Respondent . Accordingly Respondent is sustained on this 4 issue . 5 As to the second issue, the omitte d 6 nonemployee compensation income, the parties continue t o 7 disagree .- Respondent determined in the notice of deficiency 8 for 2005 that Petitioner received additional income for work 9 performed for Net Solutions, Inc ., hereinafter NSI, a 10 company later taken over by Synoptek, Inc . 11 The notice of deficiency determined that 12 Petitioner received $4,873 from NSI . At trial Responden t 13 asserted that Petitioner was paid $4,367 based upon computer 14 records from the payor . Petitioner asserts that she did not 15 perform any services for NSI and did not receive any funds 16 from NSI in 2005 . 17 In support of his position, Responden t 18 presented a copy of the Form 1099 issued by NSI, as well as 19 a computerized record which reflects payments by NSI t o 20 Petitioner during 2005 . 21 This case presents the basic dilemma of 22 trying to sort out the reality of what occurred during a 23 particular tax year . We have contrasting versions of what 24 occurred . 25 While we found Petitioner to generally be a Heritage Reporting Corporatio n (202) 628-4888 4 1 credible witness, it is difficult to ignore the documentary 2 evidence submitted by Respondent . The director o f 3 operations of Synoptek, Inc ., provided documentary evidence 4 which included screen shots of NSI's Quickbook electroni c 5 check record database . This was a record kept in the normal 6 course of NSI's business . 7 A review of the NSI record reflects payments 8 during the taxable year 2005 totaling $4,367 made t o 9 Petitioner . While the taxpayer ID numbers were redacted 10 from the documents submitted to the Court, the Cour t 11 specifically asked Petitioner to identify the unredacted 12 documents retained by Respondent . Petitioner advised that 13 the taxpayer ID number on the unredacted NSI records was in 14 fact her taxpayer ID number . 15 In contrast to Respondent's records , 16 Petitioner failed to present any records that might lead the 17 Court to conclude that NSI records were not correct . 18 Petitioner testified that she generally 19 utilized direct deposits for amounts paid to her ; thus 20 Petitioner's bank records and bank account statements might 21 have been helpful on the issue of amounts of income sh e 22 received or did not receive during 2005 . 23 Petitioner failed to produce such records or 24 any other records of income that might support he r 25 testimony . Heritage Reporting Corporation (202) 628-4888 5 1 Based upon the entire record, we conclud e 2 that Petitioners received unreported income as determined by 3 Respondent, except to the extent that Respondent conceded an 4 amount of income from NSI wasO4367 rather thanW4,873, a s 5 determined in the notice of deficiency . 6 As a result of Respondent's concession, a 7 decision will be entered under Rule 155 . 8 This concludes the Court's oral findings of 9 fact and opinionAthis case . paf2 10 (Whereupon,-at 9 :15 a .m ., the bench opinion 11 in the above-entitled matter was concluded . ) 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Heritage Reporting Corporation (202) 628-4888