- 79 -
and Howard Berger did or did not personally conduct the trade or
business of Woodbine during the years in question. They carried
on the business through Gregg Kunkowski, their agent or employee.
Moorhead v. Commissioner, T.C. Memo. 1993-314; Price v.
Commissioner, T.C. Memo. 1993-265.
During 1988 and until March 14, 1989, Howard and Alice
Berger are each subject to self-employment tax on their
respective shares of Woodbine's net earnings. During the period
thereafter that Alice Berger alone owned the Woodbine business,
she is subject to self-employment tax on her net earnings from
the business, excluding any capital gain from her sale of the
business. Sec. 1402(a)(3)(A).
Issue 7(a): Late Filing Addition Under Section 6651(a)
If a taxpayer fails to file a return by the due date,
including extensions of time for filing, and cannot show that the
failure is due to reasonable cause and not willful neglect,
section 6651(a)(1) imposes an addition to tax equal to 5 percent
of the underpayment of tax for each month, or fraction of a
month, that the return is late, not to exceed 25 percent.
Although Alice Berger filed her 1989 income tax return before the
due date as extended, respondent determined that Alice Berger's
requests for extensions of time to file were invalid and that she
is therefore liable for an addition to tax under section
6651(a).23
23Respondent has conceded that Howard and Susan Berger are
(continued...)
Page: Previous 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 NextLast modified: May 25, 2011