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Additions to Tax
Sec. Sec. Sec. Sec.
Year Deficiency 6653(b)(1)(A) 6653(b)(1)(B) 6654 6661
1986 $287,224 $368,323.70 1 $14,225.36 $71,806.00
1987 7,290 10,836.00 1 556.53 1,822.50
150 percent of the statutory interest applicable on $287,224 and $7,290
for 1986 and 1987, respectively, from the due date of the return to the date
of assessment of the tax or, if earlier, the date of the payment.
All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated. All references to petitioner are to petitioner Jack
Kramer. All references to petitioners for tax year 1985 are to
petitioner and Maxine C. Kramer (Maxine), his wife.
The issues for consideration are: (1) Whether petitioners
are liable for a deficiency in income tax for tax year 1985, and
whether petitioner is so liable for tax years 1986 and 1987; (2)
whether petitioners are liable for additions to tax for failure
to file and negligence for 1985; and (3) whether petitioner is
liable for additions to tax for fraud, underpayment of estimated
tax, and substantial understatement for 1986 and 1987.
We hold, based upon the parties' stipulations, respondent's
concessions at trial, the entire record, and the findings below,
that petitioner has deficiencies that are less than those
recomputed by respondent for 1985 and 1986 and the same as
respondent recomputed for 1987. We also hold petitioner liable
for all determined additions computed on the reduced
deficiencies.
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