Pennel Phlander Irwin - Page 2

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            Sec. 6662(a)                                                                                  
                  Year         Deficiency         Accuracy-Related Penalty                                
                  1990           $3,522                     $704                                          
                  1991            4,383                      877                                          
                  1992            4,906                      981                                          
                  After a concession by petitioner,2 the issues for decision                              
            are:  (1) Whether respondent's determination in the notice of                                 
            deficiency was arbitrary; (2) whether petitioner has any remedy                               
            in this Court in regard to respondent's purported misconduct in                               
            the course of examining petitioner's returns; (3) whether                                     
            petitioner is entitled to claimed Schedule C deductions for                                   
            various expenses incurred pursuant to his activities as a free-                               
            lance writer; (4) whether petitioner is liable for self-                                      
            employment taxes with respect to his net income earned as a free-                             
            lance writer; and (5) whether petitioner is liable for the                                    
            accuracy-related penalty under section 6662(a).                                               
                                           FINDINGS OF FACT                                               
                  Some of the facts have been stipulated, and those facts are                             
            so found.  The stipulated facts and attached exhibits are                                     
            incorporated herein by reference.  At the time of the filing of                               
            the petition, petitioner resided in Lodi, California.                                         
                  During the years in issue, petitioner worked as an                                      
            electronics training instructor for the Department of Defense.                                
            At that time, petitioner was also a self-employed writer,                                     
            reporting items of income and deductions on Schedules C.                                      

            2  Petitioner concedes that slot machine winnings of $1,421,                                  
            reported on Schedule C for 1991, should be recharacterized as                                 
            "other income".                                                                               


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