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addition to tax for substantial understatement for Federal income tax under
section 6661(a) for all years in issue. We hold that he is liable.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The
stipulation of facts and attached exhibits are incorporated herein by this
reference. At the time the petition herein was filed, petitioner resided in
Mesquite, New Mexico. Petitioner was married and filed joint income tax
returns for all years in issue.4
Schedule C Business
Petitioner listed his occupation as "minister" on his tax returns.
Furthermore, he reported income and expenses on Schedule C of Forms 1040 for
the years in issue attributable to the business of "ministrial and guidance
center" [sic].
Petitioner's business involved providing food, shelter, and medical care
to various persons in a religious communal group in exchange for payments for
room, board, and trailer rentals. The expenses claimed on Schedule C for the
years in issue were as follows:
1986 1987 1988
Insurance $2,736 $2,468 $1,120
Other interest 13,142 13,985 9,524
Office expense 1,645
Travel 9,248 9,049 5,103
Meals and entertainment5 11,868 10,530 3,986
Utilities and telephone 12,153 12,340 12,664
Guidance 27,937 29,615 6,391
Dues and publications 341
Mortgage interest 9,645
Legal and professional 2,900
4
The statutory notice of deficiency was also addressed to
"Luz Elena McWilliams". Mrs. McWilliams is not a petitioner in
this case. She was originally indicated as a petitioner;
however, she neither signed the original petition nor ratified
its filing on her behalf. Accordingly, we dismissed her for lack
of jurisdiction.
5
This amount reflects the 20 percent disallowance for years
1987 and 1988. Sec. 274(n).
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