                  T.C. Summary Opinion 2006-107



                     UNITED STATES TAX COURT



                  ROSE M. MUNOZ, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 7518-05S.            Filed July 17, 2006.


     Rose M. Munoz, pro se.

     Vivian N. Rodriguez, for respondent.



     DEAN, Special Trial Judge:   This case was heard pursuant to

the provisions of section 7463 of the Internal Revenue Code in

effect at the time the petition was filed.   Unless otherwise

indicated, subsequent section references are to the Internal

Revenue Code as in effect for the year at issue, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

The decision to be entered is not reviewable by any other court,

and this opinion should not be cited as authority.
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       Respondent determined for 2003 a deficiency in petitioner’s

Federal income tax of $3,190.    After concessions,1 the issues for

decision are:    (1) Whether petitioner received unreported

nonemployee compensation of $14,300, and (2) whether petitioner

worked as an independent contractor subject to self-employment

tax.

                             Background

       The stipulated facts and exhibits received into evidence are

incorporated herein by reference.    At the time the petition in

this case was filed, petitioner resided in Miami, Florida.

Petitioner is a native Spanish speaker who does not speak or

understand English.    Her daughter acted as her interpreter at

trial.

       During 2003, petitioner worked as an independent contractor

doing packing work for Selected Trading Corporation (STC).

Petitioner’s job involved opening boxes containing the items,

packaging them, sealing them into bags, and then putting a price

on them.    Petitioner packaged items such as hair accessories, and

she was paid on a piecework basis.




       1
      Petitioner concedes: (1) Her correct filing status is
married filing separately; (2) she is not entitled to a
dependency exemption deduction; and (3) she is not entitled to an
earned income credit.
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     Petitioner filed a 2003 Form 1040, U.S. Individual Income

Tax Return, on which she reported wages of $0, business income of

$4,964 from STC, and adjusted gross income of $4,613.     Respondent

received a Form 1099-MISC, Miscellaneous Income, from Advance

Cargo Corporation (ACC), reporting that $14,300 in nonemployee

compensation was paid to petitioner.     The Form 1099-MISC bears

petitioner’s correct Social Security number but the wrong middle

initial.

     On March 31, 2005, respondent issued to petitioner a

statutory notice of deficiency determining that petitioner had

unreported nonemployee compensation of $14,300 for services

rendered to ACC.

                            Discussion

     The Commissioner’s determinations are presumed correct, and

generally taxpayers bear the burden of proving otherwise.2    Rule

142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).

     Petitioner contends that she did not receive any unreported

nonemployee compensation, because she has never worked for ACC in

any capacity.   She testified that the only job she held in 2003

was with STC.


     2
      Petitioner has not raised the issue of sec. 7491(a), which
shifts the burden of proof to the Commissioner in certain
situations. This Court concludes that sec. 7491 does not apply
because petitioner has not produced any evidence that establishes
the preconditions for its application.
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     Respondent contends that petitioner worked as an independent

contractor for ACC during 2003 and that petitioner received

compensation in cash.   Respondent called Gabriella Olivera

(Olivera), owner and president of ACC in 2003, as a witness.

Olivera’s job was to interact with customers and to oversee the

company.

     According to Olivera, ACC is a freight forwarder.   Its

business is to load cargo into containers and to ship them to

South and Central America.   Ninety percent of the cargo shipped

by ACC was computer parts.   ACC employed both full-time employees

and independent contractors in its warehouse.   The workers were

responsible for counting, repacking, loading, and wrapping the

computer parts.   Independent contractors were paid in cash and

were generally hired during periods of “high season” to assist

with the loading of the containers.    ACC employed between 20 and

30 employees and independent contractors in 2003.

     Two people from ACC’s administration, together with an

accountant, maintained the books and records of ACC.   The

accountant prepared and sent out Forms 1099-MISC for 2003, based

on information provided by ACC during the end of the year.

Olivera testified that, because petitioner was paid $14,300 in

cash by ACC in 2003, ACC issued a Form 1099-MISC to petitioner in

2003.
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     In addition to Olivera’s testimony and the Form 1099-MISC

for 2003, respondent presented a copy of a signed Non-Employee

Written Contract between petitioner and ACC (contract).    In the

contract, petitioner agreed that she was an independent

contractor for ACC and that she was responsible for her estimated

Federal income and self-employment taxes.   Respondent also

presented a fax dated June 8, 2005, with petitioner’s notarized

signature, in which petitioner confirmed that she received a Form

1099-MISC for 2003 from ACC and that she worked at ACC in 2003.

     At trial, petitioner testified that she did not work for

ACC, claiming that her Social Security number was stolen and that

her identity was used by someone else who worked at ACC.

Petitioner argued that the name on the Form 1099-MISC, “Rosemary

D. Munoz”, was incorrect.   Petitioner’s name is “Rose Mary

Munoz”, while “Rosemary D. Munoz” was her daughter.   The Court

finds that is likely to be a clerical error rather than an

indication of identity theft.

     After respondent notified petitioner of the unreported

income, petitioner granted several individuals, including an

Orlando Rego (Rego), powers of attorney to help “investigate” the

alleged identity theft.   Petitioner testified that Rego had her

sign some documents, but she did not read them because she did

not understand English.   Petitioner further testified that Rego
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covered the documents so that the only thing that she saw was a

little check mark and the line for her to sign.

     Petitioner essentially argues that while the signatures on

the contract and the fax are hers, as a result of Rego’s actions,

she had no knowledge of the content in either document.

Generally, a taxpayer cannot avoid the duty of filing accurate

returns by placing responsibility on an agent.    Pritchett v.

Commissioner, 63 T.C. 149, 174 (1974).   Moreover, the Court is

not required to accept petitioner’s self-serving testimony.

Geiger v. Commissioner, 440 F.2d 688 (9th Cir. 1971), affg. per

curiam T.C. Memo. 1969-159; see Transp. Labor Contract/Leasing,

Inc. v. Commissioner, 123 T.C. 154, 187 (2004).    To the extent

that respondent has the burden of producing information with

respect to the Form 1099-MISC pursuant to section 6201(d),

respondent has satisfied that burden.

     Other evidence weighs in favor of a finding that petitioner

was an independent contractor for ACC in 2003.    In 2003,

petitioner lived with her teenage daughter and 85-year-old

mother.   Petitioner testified that, in 2003, their income derived

primarily from:   (1) Her independent contractor job at STC, with

an annual income of $4,963.51, and (2) her mother’s Social

Security income, with an annual income of approximately $3,600.

On its face, a monthly income of approximately $700 appears

insufficient to provide for a family of three in Miami.
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Moreover, the Court notes that the type of work in which

independent contractors engage at ACC is similar to the type of

work that petitioner did at STC.    The Court, based on all of the

evidence presented by petitioner and respondent, concludes that

petitioner was an independent contractor for ACC in 2003.

     Section 61(a) defines gross income for purposes of

calculating taxable income as “all income from whatever source

derived”.   Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 429-

431 (1955).

     Section 1401 imposes a percentage tax on self-employment

income of every individual.    See Jackson v. Commissioner, 108

T.C. 130 (1997).   Self-employment income is defined as “the net

earnings from self-employment derived by an individual * * *

during any taxable year”.    Sec. 1402(b).   The term “net earnings

from self-employment” is defined as “the gross income derived by

an individual from any trade or business carried on by such

individual, less the deductions * * * which are attributable to

such trade or business”.    Sec. 1402(a).

     Petitioner was self-employed as an independent contractor in

2003.   Accordingly, petitioner is liable for self-employment tax

under section 1401 on the unreported nonemployee compensation

received from ACC in 2003.
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    Reviewed and adopted as the report of the Small Tax Case

Division.

    To reflect the foregoing,



                                             Decision will be entered

                                        for respondent.
