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Respondent, in her notice of deficiency issued to
petitioner, determined the following deficiencies in, and
additions to, petitioner's Federal income tax:
Year Deficiency Additions to Tax
Sec. 6653(b)(1)(A)Sec. 6653(b)(1) Sec.6653(b)(1)(B)Sec. 6661
1987 $48,286 $36,215 1 $12,072
1988 23,621 $17,7165,905
1Sec. 6653(b)(1)(B) provides for an addition to tax equal to 50 percent of the interest
due under sec. 6601 on the portion of the underpayment attributable to fraud.
After concessions, the issues for adjudication are whether
petitioner is liable for: (1) Income tax deficiencies for
taxable years 1987 and 1988; (2) additions to tax for substantial
understatement of income tax pursuant to section 6661 for taxable
years 1987 and 1988; and (3) additions to tax for fraud pursuant
to section 6653(b) for taxable years 1987 and 1988.
Background
Petitioner resided in Beltsville, Maryland, at the time the
petition was filed in this case. Respondent determined
deficiencies in petitioner's income tax based on petitioner's
unreported wages, disallowed deductions, and unreported income
from embezzled funds. The petition generally challenges "all
items in the deficiency notice".
Respondent's answer denies the substantive allegations of
the petition and alleges affirmatively that petitioner is liable
for additions to tax pursuant to section 6653(b) for fraud and,
in the alternative, for additions to tax pursuant to section
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