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1 50 percent of the interest due on the portion of the
underpayment attributable to negligence.
The issues for decision are: (1) Whether petitioners are
entitled to deductions for business bad debts. We hold that they
are to the extent stated herein. (2) Whether petitioners are
entitled to interest expense deductions in excess of the amounts
allowed by respondent. We hold that they are to the extent
stated herein. (3) Whether petitioners are liable for the
addition to tax under section 6651(a)1 for failure to timely file
their Federal income tax return. We hold that they are liable.
(4) Whether petitioners are liable for the addition to tax under
section 6661(a) for substantial understatement of income tax. We
hold that they are to the extent stated herein. (5) Whether
petitioners are liable for the addition to tax under section
6653(a) for negligence. We hold that they are liable.
FINDINGS OF FACT
The stipulation of facts and attached exhibits are
incorporated herein by this reference. At the time the petition
herein was filed, petitioners resided in San Marcos, Texas.
Petitioners filed a Form 1040, U.S. Individual Income Tax Return,
using the status "married filing joint", for the year at issue.
References to petitioner are to James K. Wise.
1All section references are to the Internal Revenue Code in
effect for the taxable year in issue, and all Rule references are
to the Tax Court Rules of Practice and Procedure, unless
otherwise indicated.
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