                          T.C. Memo. 1997-209



                      UNITED STATES TAX COURT



                  TODD A. CLARK, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No.   323-96.                 Filed May 5, 1997.



     Robert J. Gumser, for petitioner.

     Roberta D. Repasy, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     LARO, Judge:   Todd A. Clark petitioned the Court to

redetermine respondent's determination with respect to his 1991

and 1993 taxable years.     Respondent determined the following

deficiencies in Federal income taxes and additions thereto:

                                        Additions to Tax
                                        Sec.         Sec.
                                   - 2 -

            Year      Deficiency           6651(a)(1)    6654

            1991       $11,214              $2,804       $645
            1993         1,156                 289        ---

     We must decide the following issues:

     1.   Whether petitioner's 1991 gross income includes the

$38,390 amount reported to him on a 1991 Form 1099, Wage and Tax

Statement.    We hold it includes only 50 percent of this amount.

     2.   Whether petitioner's 1993 gross income includes the

$7,365 amount reported to him on a 1993 Form 1099.         We hold it

does not.

     3.   Whether petitioner is liable for the additions to tax

determined by respondent.    We hold he is to the extent described

herein.

     Section references are to the Internal Revenue Code in

effect for the years in issue.      Rule references are to the Tax

Court Rules of Practice and Procedure.         Dollar amounts are

rounded to the nearest dollar.

                          FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulated facts and the exhibits submitted therewith are

incorporated herein by this reference.         Petitioner resided in

Escondido, California, when he petitioned the Court.

     During 1991, petitioner worked as an independent contractor

washing the windows of model homes in the vicinity of San Diego,

California.    Petitioner received assignments on a monthly basis
                                 - 3 -

from a general contractor, Model Maintenance, Inc. (Company), and

the Company paid petitioner for the jobs once a month.

Petitioner worked with another individual, Duram McManus, and

petitioner paid Mr. McManus 50 percent of the amount shown on

each check that he received from the Company for the jobs.

During 1991, petitioner received $38,390 from the Company,

inclusive of the amount that he paid to Mr. McManus.    The Company

issued petitioner a 1991 Form 1099 showing this amount.

     During 1993, petitioner performed no work for the Company.

Mr. McManus performed all of the work, and he received 100

percent of the amounts shown on the checks from the Company for

that year.   The Company issued checks payable only to petitioner.

The checks were endorsed on the back as "Pay to the order of

Durham McManus", who ultimately cashed them.    During 1993,

petitioner received $7,365 from the Company, inclusive of the

amount paid to Mr. McManus.   The Company issued petitioner a 1993

Form 1099 showing this amount.

     Petitioner did not file a 1991 or 1993 Federal income tax

return.   Petitioner did not make any estimated payments for

either year.

                              OPINION

     Petitioner must prove that respondent's determinations set

forth in the notice of deficiency are incorrect.    Rule 142(a);

Welch v. Helvering, 290 U.S. 111, 115 (1933).    Petitioner relies

mainly on his testimony to disprove respondent's determinations.
                               - 4 -

We find his testimony unimpeached and persuasive.   Petitioner

testified that he received the amount shown on the 1991 Form

1099, but that he paid 50 percent of this amount to Mr. McManus.

We believe this testimony.   We hold that petitioner's 1991 gross

income includes only 50 percent ($19,195) of the amount shown on

the 1991 Form 1099.

     With respect to 1993, we hold that petitioner's gross income

includes none of the amount shown on the 1993 Form 1099.   We find

that Mr. McManus performed all of the services that generated

this income, and that he ultimately received all of the proceeds

reflected on the 1993 Form 1099 which was issued to petitioner.

Although the checks were payable only to petitioner, the checks

were endorsed on the back as "Pay to the order of Durham

McManus", who ultimately cashed them.   We hold for petitioner

with respect to 1993.   Our holding on this issue means naturally

that petitioner also is not liable for the addition to tax

determined by respondent for that year.

     Turning to the additions to petitioner's 1991 tax,

respondent determined that petitioner failed to file a 1991 tax

return, and that he failed to make any estimated payments for

that year.   Accordingly, respondent determined, petitioner was

liable for the related additions to tax.   Petitioner contends

that he did not file a 1991 return because he did not have the

money to pay any tax that would have been due with that return.
                                - 5 -

Petitioner makes no contention with respect to the addition to

tax under section 6654.

     We hold for respondent as to both additions.         In order to

avoid the addition to tax under section 6651(a)(1), petitioner

must prove that his failure to file was:      (1) Due to reasonable

cause and (2) not due to willful neglect.      Sec. 6651(a); Rule

142(a); United States v. Boyle, 469 U.S. 241, 245 (1985); see

United States v. Nordbrock, 38 F.3d 440 (9th Cir. 1994).

Petitioner has failed to prove that his failure to file was due

to reasonable cause and not due to willful neglect.

     The addition to tax under section 6654 is mandatory unless

petitioner proves that he has met one of the exceptions contained

in section 6654.    Recklitis v. Commissioner, 91 T.C. 874, 913

(1988).   Petitioner has failed to show that any of the statutory

exceptions apply.

     To reflect the foregoing and to make certain computational

adjustments,

                                             Decision will be entered

                                        under Rule 155.
