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All section references are to the Internal Revenue Code in effect
for the years in issue, and all Rules references are to the Tax
Court Rules of Practice and Procedure.
After concessions,1 the issues for decision are:
(1) Whether petitioners underreported their Schedule C gross
receipts for the years 1991 and 1992 in the amounts of $9,733 and
$16,403, respectively;
(2) whether petitioners are entitled to Schedule C
deductions for car and truck expenses for the years 1991 and 1992
in amounts greater than those allowed by respondent; and
(3) whether petitioners are liable for accuracy-related
penalties under section 6662(a) for negligence or disregard of
rules or regulations.
FINDINGS OF FACT
Petitioners, husband and wife, lived in Tulsa, Oklahoma, at
the time the petition was filed in this case.
During 1991 and 1992,2 Mr. Frias was self-employed primarily
as a house painter. He also worked as a musician and magician.
Petitioners reported their gross income and deductions on one
Schedule C; they described their principal business as
"Painting/Music". Petitioners were cash basis taxpayers.
Petitioners' tax returns were prepared by Richard Gardner.
1 On brief, petitioners have conceded the sec. 6651(a)
issue.
2 Unless otherwise indicated, all descriptions refer to the
1991 and 1992 tax years.
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