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Additions to Tax and Penalties
Sec. Sec. Sec.
Year Deficiency 6653(a)(1) 6661(a) 6662(a)
1988 $9,864 $493 $2,020 -0-
1989 13,603 -0- -0- $2,603
1990 29,476 -0- -0- 5,895
After concessions by the parties, which will be given effect
in the Rule 1551 computation, the issues for decision are:
(1) Whether petitioners understated gross receipts for
taxable years 1988, 1989, and 1990 in the amounts of $27,678,
$27,016, and $39,219, respectively, as determined by respondent.
We hold that they did.
(2) Whether petitioners overstated business expense
deductions for the taxable years at issue as determined by
respondent. We hold that they did.
(3) Whether petitioners had unreported capital gain for
taxable year 1990 in the amount of $38,700 as determined by
respondent. We hold that they did.
(4) Whether petitioners are liable for an addition to tax
for negligence under section 6653(a)(1) for taxable year 1988 and
accuracy-related penalties for negligence under section 6662(a)
for taxable years 1989 and 1990. We hold that they are.
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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Last modified: May 25, 2011