John Robert Forrest - Page 3

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          were self-employment income during the taxable years in which               
          such payments were received.  He has also stipulated that                   
          respondent properly determined the amounts of his distributive              
          shares of FSC's income, loss, and deductions for the taxable                
          years in issue.                                                             
               The first issue for decision is whether petitioner received            
          and failed to report income during the taxable years in issue.              
               Petitioner has stipulated to all of the adjustments in the             
          statutory notice of deficiency except for the unreported interest           
          income determined from information returns received by                      
          respondent.  Petitioner has not asserted any reasonable dispute             
          with respect to the accuracy of the information returns.  Cf.               
          sec. 6201(d).  Based on the record, we find that petitioner has             
          failed to prove any error in respondent's determinations of his             
          unreported income.  Rule 142(a).  Accordingly, we hold that                 
          petitioner received and failed to report income during the                  
          taxable years in issue in the amounts determined by respondent.             
               The second issue for decision is whether petitioner is                 
          liable for the section 6651(a)(1) additions to tax for failure to           
          file his returns for the taxable years in issue.                            
               Section 6651(a)(1) imposes an addition to tax for failure to           
          timely file a return, unless the taxpayer establishes that such             
          failure is due to reasonable cause and not due to willful                   
          neglect.  "Reasonable cause" requires the taxpayer to demonstrate           
          that he exercised ordinary business care and prudence and was               




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Last modified: May 25, 2011