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The issues remaining for decision are:
(1) Do petitioners have unreported income for each of the
years 1989 and 1990? We hold that they do to the extent stated
herein.
(2) Are petitioners liable for self-employment tax for each
of the years 1989 and 1990? We hold that they are to the extent
stated herein.
(3) Are petitioners liable for the accuracy-related penalty
under section 6662(a) for each of the years 1989 and 1990? We
hold that they are to the extent stated herein.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
Petitioners resided in Hillsboro, Oregon, at the time the
petition was filed. They filed joint Federal income tax returns
(returns) for the years 1989 and 1990.
Charles Harp Construction
During the years at issue, petitioner Charles R. Harp,2 who
as of the time of the trial herein had a high school education
and had not received any formal training in accounting or book-
keeping matters, operated a sole proprietorship under the name
"Charles Harp Construction" (sole proprietorship) that he had
started in 1984 and that engaged in the residential construction
2 Hereinafter, references to petitioner in the singular are to
petitioner Charles R. Harp.
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