Greta Ann Clifton - Page 23

                                       - 23 -                                         
               Section 1401 imposes taxes on the self-employment income of            
          every individual.  Section 1402(b) defines self-employment income           
          as the net earnings from self-employment derived by an                      
          individual.  Section 1402(a) defines an individual's net earnings           
          from self-employment as the gross income derived by an individual           
          from any trade or business carried on by such individual, reduced           
          by income tax deductions attributable to the trade or business.             
          Petitioner bears the burden of proving that she is not liable for           
          additional taxes imposed by section 1401.  Rule 142(a).                     
               Petitioner does not dispute that she had additional self-              
          employment income during the year at issue.  Therefore, we affirm           
          respondent's determination.                                                 
          Issue 6. Negligence                                                         
               Respondent determined that petitioner was liable for the               
          additions to tax for negligence under section 6653(a)(1) and (2).           
               Section 6653(a)(1) provides for an addition to tax of 5                
          percent of the underpayment if any part of the underpayment is              
          due to negligence or intentional disregard of rules or                      
          regulations.  Section 6653(a)(2) provides for an addition to tax            
          of 50 percent of the interest payable under section 6601 with               
          respect to the portion of the underpayment which is attributable            
          to negligence or intentional disregard of rules or regulations.             
               Negligence under section 6653(a) is a "'lack of due care or            
          failure to do what a reasonable and ordinarily prudent person               
          would do under the circumstances.'"  Neely v. Commissioner, 85              




Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011