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(6) Whether petitioners had unreported interest income of
$709 for 1987, $306 for 1988, and $379 for 1989. We hold that
they did.
(7) Whether petitioners may deduct advertising, rent,
office expenses, utilities and telephone, commissions, supplies,
licenses and fees, dues, rental maintenance, and insurance
expenses in excess of the amounts allowed by respondent. We hold
that they may not, except as discussed below.
(8) Whether petitioners may carry forward a net operating
loss of $1,008 for 1988. We hold that they may not.
(9) Whether petitioner Bruno Tabbi is liable for the
addition to tax for fraud under section 6653(b) for 1988 and the
fraud penalty under section 6663 for 1989. We hold that he is
not.
(10) Whether petitioners are liable for additions to tax
for: (a) Negligence under section 6653(a) for 1987 and, in the
alternative to fraud, for 1988 and the negligence penalty under
section 6662 for 1989; (b) substantial understatement of income
tax under section 6661 for 1987 and 1988; and (c) late filing
under section 6651(a)(1) for 1987 and, in the alternative to
fraud, for 1989. We hold that they are liable for the additions
to tax for negligence and substantial understatement of tax for
1987 and 1988, the negligence penalty for 1989, and the addition
to tax for late filing for 1987, but that they are not liable for
the addition to tax for late filing for 1989.
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