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amount of $375 on December 5, 1989, for December rent. Two
checks were drawn on this account in the amounts of $704.70 and
$498 to pay petitioner's car insurance premiums. During the
latter part of 1989, petitioner deposited her paychecks from
Pitney Bowes into this account.
Petitioner quit her Too Close To Home activity at the end of
1989. Later, petitioner revived Too Close To Home as a
charitable corporation, but it remained active less than 1 year.
On March 1, 1994, respondent issued a notice of deficiency
to petitioner for the tax year 1989. Respondent determined that
petitioner had unreported wage income in the amount of $29,848.
After allowing for the standard deduction, respondent determined
a deficiency in petitioner's Federal income tax for 1989 in the
amount of $4,511. Respondent further determined an addition to
tax in the amount of $685.75 pursuant to section 6651(a), for
failure to file a return within the prescribed time, and an
addition to tax pursuant to section 6654(a), for the underpayment
of estimated taxes.
After receiving the notice of deficiency, petitioner filed
her Federal income tax return for 1989. Petitioner reported wage
income of $29,848. On Schedule A of the Form 1040, petitioner
reported State and local taxes in the amount of $1,283 and a
deduction for unreimbursed employee business expenses for
automobile expense in the amount of $8,404 above the 2-percent
floor. Petitioner deducted only $8,404 as itemized deductions.
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