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Respondent determined, in the alternative to the fraud additions
to tax, that petitioners are liable for the negligence additions
to tax under section 6653(a)(1)(A) and (B) for 1987 and section
6653(a)(1) for 1988.
Unless otherwise indicated herein, all section references
are to the Internal Revenue Code in effect for the years 1987 and
1988, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
In respondent's answer filed on January 29, 1993, it is
conceded that the fraud additions to tax for 1987 and 1988 are
not due from petitioner Beverly S. McKenna.
The issues for decision are:
1. Whether voluntary payments made by petitioners were
properly assessed when they were received by respondent along
with unsigned amended Federal income tax returns for 1987 and
1988 prior to sending the notice of deficiency.
2. Whether petitioners failed to report Schedule C income
from petitioner Dwight L. McKenna's medical practice in the
amounts of $175,285 for 1987 and $191,979 for 1988.
3. Whether petitioner Dwight L. McKenna is liable for the
additions to tax under section 6653(b)(1)(A) and (B) for the
fraudulent underpayment of his Federal income taxes for 1987, and
under section 6653(b)(1) for the fraudulent underpayment of his
Federal income taxes for 1988.
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