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Respondent determined deficiencies in petitioner's
Federal income taxes, together with penalties, as follows:
Penalty
Year Deficiency Sec. 6662(a)
1989 $5,390 $944
1990 4,046 779
By Amendment to Answer, respondent asserted penalties under
section 6663(a) for 1989 and 1990 in the amounts of $4,042 and
$3,034, respectively.
The issues for decision are: (1) Whether petitioner
understated her income from tips for the years in issue; (2)
whether petitioner is liable for fraud penalties pursuant to
section 6663(a); and (3) if not liable for the fraud penalties,
whether petitioner is liable for accuracy-related penalties
pursuant to section 6662(a).
Some of the facts have been stipulated, and are so found.
Petitioner resided in Astoria, New York, when her petition was
filed.
For clarity and convenience, our findings of fact and
opinion have been combined.
During the years in issue, petitioner worked full-time as a
waitress at Sandomenico New York, Inc. (Sandomenico), an upscale,
expensive restaurant in New York City, New York. The principal
issue in this case is the amount of tip income earned by
petitioner at this job.
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