Valerie Jean Genck - Page 2

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               Respondent determined a deficiency in petitioner's Federal             
          income tax for 1992 in the amount of $5,127, an addition to tax             
          pursuant to section 6651(a)(1) in the amount of $1,313, and an              
          accuracy-related penalty pursuant to section 6662(a) in the                 
          amount of $1,025.                                                           
               The issues for decision are:  (1) Whether petitioner is                
          entitled to Schedule C business expense deductions; (2) whether             
          petitioner is liable for the section 6651(a)(1) addition to tax;            
          and (3) whether petitioner is liable for the section 6662(a)                
          accuracy-related penalty.2                                                  
               Some of the facts have been stipulated and are so found.               
          The stipulations of fact and the attached exhibits are                      
          incorporated herein by this reference.  Petitioner resided in               
          Hollywood, Florida, on the date the petition was filed in this              
          case.                                                                       
               Petitioner works as a self-employed musician and band                  
          manager.  She and her husband, Matthew Genck, are members and               
          managers of a jazz band named "Paris" (the band).  Petitioner               
          spends an average of 12 hours per week performing as the band's             
          lead singer.  Matthew plays the bass guitar.  Although petitioner           
          and Matthew are primarily responsible for managing the band, they           
          generally split the band's profits and expenses three ways with             

          2         Respondent's adjustments to petitioner's liability for            
          self-employment taxes and deduction for one-half of such                    
          liability are computational and will be resolved by the Court's             
          holdings on the issues in this case.                                        




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