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stipulated, the only remaining issue for trial is whether
petitioner is liable for an accuracy-related penalty under
section 6662. The parties filed a stipulation of settled issues
showing that petitioner failed to report a State tax refund of
$235; interest income of $736; and net gambling income of
$27,407. The parties also stipulated agreed adjustments to
Schedule C of petitioner's income tax return as follows:
Description Per return Agreed adjustment to return Agreed total
Gross Receipts $23,960 $80,902 $104,862
Less: Cost of 25,881 47,143 73,024
Sales
Gross Income (1,921) 33,759 31,838
Petitioner had deducted Schedule C expenses of $17,237. The parties agree to
an adjustment of $6,576, or total Schedule C expenses in the amount of
$10,661. These agreements result in net Schedule C income in the amount of
$21,177 (i.e., $31,838-$10,661), as opposed to a loss of $19,158 claimed on
the return. There will also be an automatic adjustment to self-employment
tax, which will be computed mathematically.
Some of the facts have been stipulated and are so found. The
stipulation and attached exhibits are incorporated herein by this reference.
At the time of filing the petition herein, petitioner resided in San Jose,
California.
Petitioner was born May 5, 1957, in Tabriz, Iran. He attended but did
not complete college in the United States and became a permanent resident in
1984. Since that time he has been employed as an engineer.
In mid-1988 petitioner started a business called ESTI Memory
International (EMI). Petitioner's father died in 1989; his mother still lives
in Iran.
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Last modified: May 25, 2011