Kathleen J. Kelly - Page 10

                                                 10                                                   
            for those purposes.  Petitioner paid expenses not associated with                         
            the activity, such as her insurance premiums, from the account.                           
            Petitioner had no business records for the activity.  Petitioner                          
            had no expertise in providing tours, nor did she have any special                         
            knowledge of Haiti.  Petitioner did not devote much of her time                           
            to Too Close To Home.  She worked 80 hours a week in her jobs and                         
            carried on Too Close to Home during lunch and between jobs.                               
            Petitioner did not carry on Too Close To Home for profit during                           
            the year in issue.  Therefore, her deductions are limited to the                          
            income derived from the activity, which was zero.  Petitioner                             
            offered no evidence to support a deduction for State and local                            
            income taxes.  Therefore, she is not entitled to a deduction.                             
                  Respondent determined an addition to tax as a result of                             
            petitioner's failure to file a timely return.  Section 6651(a)(1)                         
            imposes an addition to tax for failure to file a timely tax                               
            return.  The addition to tax is equal to 5 percent of the amount                          
            of the tax required to be shown on the return if the failure to                           
            file is not more than 1 month.  Sec. 6651(a)(1).  An additional 5                         
            percent is imposed for each month or fraction thereof in which                            
            the failure to file continues, to a maximum of 25 percent of the                          
            tax.  Id.  The addition to tax is applicable unless petitioner                            
            establishes that the failure to file was due to reasonable cause                          
            and not willful neglect.  Id.                                                             
                  Petitioner's 1989 return was received by respondent on                              
            September 1, 1995.  Petitioner offered no testimony or evidence                           




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next

Last modified: May 25, 2011