                      T.C. Memo. 1996-115



                    UNITED STATES TAX COURT



                   NORMA NEIMAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



    Docket No. 27103-93.         Filed March 11, 1996.



    James C. Neiman (specially recognized),1 for petitioner.

    Matthew J. Fritz, for respondent.




    1
        The Court was advised that petitioner Norma Neiman, who
is elderly and lives in Florida, would not appear at trial. This
matter had been continued on one prior occasion based on
petitioner's request. The Court permitted petitioner's son,
James C. Neiman, to appear specially for the submission of
documents that were not objected to by respondent.
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                        MEMORANDUM OPINION


     PANUTHOS, Chief Special Trial Judge:    This case was heard

pursuant to the provisions of section 7443A(b)(3) and Rules 180,

181, and 182.2

     Respondent determined a deficiency in the amount of $1,522

in petitioner's Federal income tax for the taxable year 1990.3

The issues for decision are:

     1.   Whether petitioner and her husband, Jacob B. Neiman,

failed to report income received by Jacob B. Neiman; and

     2.   Whether said income is subject to self-employment tax.4

     At the time of filing the petition herein, petitioner

resided at Cincinnati, Ohio.   While no formal stipulation was

filed, the parties agreed to a number of exhibits which were made

part of this record.   There was no testimony, and, accordingly,




     2
        All section references are to the Internal Revenue Code
in effect for the tax year at issue. All Rule references are to
the Tax Court Rules of Practice and Procedure.
     3
        Jacob B. Neiman died in Mar. 1993, prior to the filing of
the petition herein. A notice of deficiency was issued to
petitioner Norma Neiman and Jacob B. Neiman, deceased. The
petition was captioned in both names. By order dated Apr. 6,
1994, respondent's motion to dismiss for lack of jurisdiction as
to the estate of Jacob B. Neiman, deceased, and to change caption
was granted since Norma Neiman failed to establish that she had
authority to represent her deceased husband. The caption of this
case was changed to read "Norma Neiman, Petitioner, v.
Commissioner of Internal Revenue, Respondent".
     4
        Issues of omitted interest and dividend income were not
contested by petitioner.
                                - 3 -

our findings are based on the pleadings and documents submitted

at trial.

     Jacob B. Neiman, petitioner's husband, was an insurance

agent for many years.    During 1990, he did business with the Irv

and Bob Kemp Agency (Kemp).    During 1990, Jacob B. Neiman was

paid $14,5425 in first year commissions.     He was also paid $2,665

in renewal commissions in 1990.    Kemp sent Mr. Neiman Forms 1099

with respect to these two payments.     Kemp also advanced Mr.

Neiman $4,080 in 1990.    Mr. Neiman agreed to repay the advance by

offsetting the payment against future commissions.      The advance

was repaid sometime in 1992.    No Form 1099 was issued to Mr.

Neiman with respect to the $4,080 advance made in 1990, nor was

the amount included as income on the 1990 return.

     On Schedule C of the jointly filed Federal income tax return

for 1990, petitioner and her husband reported the $14,542 payment

and the $2,665 payment.   Petitioner then subtracted the $4,080

advance from the commission income reported on the return.

     In the notice of deficiency, respondent determined that

commission income was understated by $4,080.      Petitioner

acknowledges that the $4,080 was erroneously deducted from

commission income received, and, therefore, the income on the

1990 return was understated by $4,080.      Petitioner argues that

she should be excused from liability for tax on the


     5
         Rounded to nearest whole dollar.
                                 - 4 -

understatement because she suffers from physical, emotional, and

financial difficulties.

       Respondent's determination in the notice of deficiency is

presumptively correct, and petitioner bears the burden of proving

error.    Rule 142(a); INDOPCO, Inc. v. Commissioner, 503 U.S. 79

(1992); Welch v. Helvering, 290 U.S. 111 (1933).

       There is no question that commissions are includable as

taxable income.    Sec. 61(a).   Petitioner does not seriously

dispute that the advance was erroneously deducted from commission

income received.    Respondent is thus sustained on this issue.

       Section 1401 imposes a tax on self-employment income.

Section 1402 defines net earnings from self-employment as gross

income derived from a trade or business less certain deductions.

Commission income from Kemp was reported on a Schedule C.

Petitioner does not seriously dispute that the commission income

is not subject to self-employment tax.     Respondent is sustained

on this issue.

       Petitioner makes a vague reference to the statute of

limitations suggesting that the time has expired for assessment

of the tax.    The short answer to petitioner's argument is that

the 1990 return was filed on August 16, 1991.     The notice of

deficiency was mailed on September 24, 1993.     A timely petition

was filed with this Court.    The period of limitations has not

run.    Secs. 6501(a), 6503(a)(1), 6213.
                                 - 5 -

     Petitioner asks this Court to consider her difficult

physical, emotional, and financial circumstances.     As we

indicated at the conclusion of the trial of this case, our

jurisdiction, as defined by Congress, is limited to a

determination of the correct tax liability.    We again recommend

that petitioner communicate with appropriate persons within the

Internal Revenue Service to seek advice and assistance with

respect to payment of the tax liability.

     To reflect the foregoing,

                                         Decision will be entered

                                    for respondent.
