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Additions to Tax & Penalties
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6653(b)(1) 6663
1988 $178,198 --- $133,649 ---
1989 40,454 $10,114 --- $30,341
1990 36,405 9,101 --- 27,304
Respondent seeks, in the event the Court does not sustain the fraud
determination for 1988, additions to tax for negligence or
disregard of rules or regulations pursuant to section 6653(a)(1),
substantial understatement of tax pursuant to section 6661(a), and
failure to timely file a Federal tax return pursuant to section
6651(a)(1). Additionally, in the event the Court does not sustain
the fraud determinations for 1989 and 1990, respondent seeks
accuracy-related penalties pursuant to section 6662 for negligence
or disregard of rules or regulations or substantial understatement
of tax.
The 1988 deficiency arises from respondent's determination
that petitioners had unreported income from a grocery/convenience
store business, a jewelry business, a check-kiting scheme, an
individual retirement account distribution, and interest from bank
accounts. The 1989 deficiency arises from unreported income of the
grocery/convenience store business and from gambling, and the 1990
deficiency arises from unreported income of the grocery/convenience
store business, gambling winnings, and interest. For all 3 years
in issue, deficiencies were also determined for failure to report
self-employment taxes with respect to the unreported income from
petitioners' business activities.
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Last modified: May 25, 2011