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MEMORANDUM FINDINGS OF FACT AND OPINION
HALPERN, Judge: For petitioners’ taxable (calender) year
1990, respondent determined a deficiency in petitioners’ Federal
income tax liability of $28,694 and an accuracy-related penalty
of $371.
The issues remaining for decision are: (1) Whether, during
1990, petitioner husband was a shareholder in an S corporation so
that petitioners are required to report his pro rata share of the
corporation’s income and certain other items, (2) whether
petitioners failed to report $6,500 of nonemployee compensation
received by petitioner husband from the S corporation in 1990,
and (3) whether petitioners were negligent in filing their 1990
return.
Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the taxable year in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
FINDINGS OF FACT
Introduction
Petitioners are husband and wife, who, for 1990, made a
joint return of Federal income tax liability. Petitioners
resided in Los Altos Hills, California, at the time the petition
in this case was filed. Petitioner husband (hereafter,
petitioner) is an attorney and member of the California bar.
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