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of his estimated tax payments and withholding for 1998 ($1,866),
respondent has shown that it is appropriate to determine a
section 6654 addition to tax with respect to petitioner for 1998,
and we so find.5
With respect to 1999, respondent’s evidence also shows the
following, which we find accordingly: Petitioner filed no return
for 1998; his tax liability for 1999 is $3,299; he made no
payments of estimated tax for 1999; he had no withholdings in
1999. Where, as here, no return is filed for the immediately
preceding taxable year, the estimated tax payment is computed as
90 percent of the taxpayer’s tax for the year at issue. Since 90
percent of petitioner’s tax liability for 1999 is $2,969, and
petitioner had no estimated tax payments or withholding for 1999,
respondent has shown that it is appropriate to determine a
section 6654 addition to tax with respect to petitioner for 1999,
and we so find.
III. Penalty
Section 6673(a)(1) provides that the Court may impose a
penalty not in excess of $25,000 where, among other things, a
5 We question whether, in computing petitioner’s sec. 6654
addition to tax for 1998, respondent determined that addition to
tax on the proper basis. From the notice of deficiency, it
appears to the Court that respondent ignored the computation for
the previous year’s tax liability, which was the lesser of the
two computations. However, petitioner has not challenged that
computation, nor has respondent justified it. We assume that, in
the Rule 155 computation, the parties will compute the correct
amount of the addition to tax.
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