Richard and Brenda Nelon - Page 2

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                            Additions to Tax                                          
          Sec.           Sec.            Sec.          Sec.                           
          Year    Deficiency   6651(f)    6653(b)(1)(A)     6653(b)(1)       6654     
          1986    $77,772       -0-        1$58,329             -0-         $3,762    
          1988      75,917       -0-           -0-           $56,938         4,855    
          1989      90,355    $67,766          -0-              -0-          6,110    
          1990      79,886     59,915          -0-              -0-          5,261    
          1991      96,053     72,040          -0-              -0-          5,526    
               1 In addition, with respect to the taxable year 1986, respondent has   
          determined an addition to tax pursuant to sec. 6653(b)(1)(B) in an amount   
          equal to 50 percent of the interest due on the underpayment attributable to 
          fraud.                                                                      
          Respondent also determined a deficiency and additions to tax                
          against petitioners, jointly, for the 1987 taxable year.                    
                 Additions to Tax                                                     
          Sec.                Sec.                                                    
              Year        Deficiency      6653(b)(1)(A)           6661               
               1987      $93,523          1$70,142             $23,381                
                    1 Respondent also determined, with respect to the taxable         
               year 1987, an addition to tax pursuant to sec. 6653(b)(1)(B) in an     
               amount equal to 50 percent of the interest due on the underpayment     
               attributable to fraud.                                                 
          Finally, as an alternative position, respondent determined that             
          if the Court does not find liability for sections 6651(f) and/or            
          6653(b), then the delinquency addition to tax should apply in               
          each year and the negligence addition should also be applied for            
          1986, 1987, and 1988.                                                       
               After concessions, the remaining issues for our                        
          consideration are:  (1) Whether petitioner Richard Nelon is                 
          liable for additions to tax for fraud under section                         
          6653(b)(1)(A)1 and (B) for the taxable years 1986 and 1987 and              



               1 Section references are to the Internal Revenue Code in               
          effect for the taxable years at issue.  Rule references are to              
          this Court’s Rules of Practice and Procedure.                               





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