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In the alternative to the fraud penalties, respondent asserts in
the answer to the petition that petitioners are liable for the
accuracy-related penalties for 1991 and 1992 pursuant to section
6662(a).
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
After concessions,1 the issues to be decided are as follows:
(1) Whether petitioner Ramon Ortiz had substantial amounts
of unreported self-employment income for 1991 and 1992 from his
wholesale used car business;
(2) whether petitioners received additional interest income
for 1991 and 1992 in the respective amounts of $3,500 and $3,000;
(3) whether petitioners are entitled to a capital loss in
1991 in the amount of $3,000;
(4) whether petitioner Ramon Ortiz is liable for additional
self-employment taxes for 1991 and 1992;
(5) whether petitioner Irma Ortiz is liable for fraud
penalties under section 6663 for 1991 and 1992; and
1 Petitioners concede that they received interest of
$18,000 in 1991 and $4,000 in 1992 which was not reported on
their Federal income tax returns. Respondent concedes that
$25,000 of petitioners' unreported income for 1992 is not subject
to self-employment tax. These concessions, along with two
computational adjustments for 1992 relating to a reduction in
itemized deductions and the recapture of a claimed earned income
credit, can be given effect in the Rule 155 computations.
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