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Accuracy-Related Penalties - Sec. 6662(a)2
Year Deficiency Sec. 6662(b)(1) Sec. 6662(b)(2)
1990 $14,753 --- $2,815
1991 4,195 $839 ---
1992 3,956 791 ---
Several issues have been conceded or settled by the parties.
The issues presented for decision are: (1) Whether petitioners
are entitled to claimed losses incurred in their model railroad
activity for 1990, 1991, and 1992, so as to allow the expenses in
excess of the income from the activity to be deducted for Federal
income tax purposes; (2) whether petitioners are entitled to a
nonbusiness bad debt deduction for 1990; (3) whether amounts
received by petitioner James J. Lencke as residual insurance
premiums and in lieu of renewal insurance commissions during 1990
and 1991 are subject to self-employment tax under sections 1401
and 1402; (4) whether petitioners are liable for an accuracy-
related penalty for an underpayment of tax attributable to a
substantial understatement for 1990; and (5) whether petitioners
are liable for accuracy-related penalties for negligence or
disregard of rules or regulations for 1991 and 1992.
FINDINGS OF FACT
Some of the facts have been stipulated and are found
accordingly. The stipulation of facts and three supplemental
2 All section references are to the Internal Revenue Code
in effect for the years in issue, and all Rule references are to
the Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
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Last modified: May 25, 2011