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Respondent determined deficiencies in petitioners' 1990 and
1991 Federal income taxes in the amounts of $3,190 and $2,941,
respectively. The issues for decision are: (1) Whether
petitioners are entitled to trade or business expense deductions
for payments to religious organizations made during the years
1990 and 1991; and (2) whether the self-employment tax imposed by
section 1401 is applicable to the earnings from Dean W. May's
piano service and sales business for the years in issue.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits attached thereto are
incorporated herein by this reference. During the years in
issue, petitioners were husband and wife and filed joint Federal
income tax returns. At the time the petition was filed,
petitioners resided in Terre Haute, Indiana. References to
petitioner are to Dean W. May.
Background
During the years 1990 and 1991 petitioners were members of
the Maryland Community Church, an interdenominational church in
Terre Haute, Indiana. Also during 1990, petitioners were members
of Sugar Creek Baptist Church in Indianapolis, Indiana.
Petitioners made payments to the Maryland Community Church in the
amounts of $2,220 and $3,545 in 1990 and 1991, respectively.
Petitioners also made payments to Sugar Creek Baptist Church in
the amount of $1,383 in 1990.
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