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of Practice and Procedure. Respondent determined the following
deficiencies, addition to tax, and accuracy-related penalties:
Addition to taxAccuracy-related penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6662(a)
1993 $6,925 $222 $1,181
1994 7,953 --- 1,591
After concessions, the remaining issues for decision are:
(1) Whether petitioners are entitled to Schedules C deductions in
excess of the amounts allowed by respondent, (2) whether
petitioners are liable for an addition to tax under section
6651(a)(1) for taxable year 1993, and (3) whether petitioners are
liable for accuracy-related penalties under section 6662(a) for
taxable years 1993 and 1994.
Some of the facts have been stipulated and are so found.
Petitioners resided in District Heights, Maryland, at the time
their petition was filed.
During the taxable years at issue, petitioner Preston L.
Payton (Preston) was employed as a truck driver by Browning
Ferris, Inc., and petitioner Ruby M. Payton (Ruby) was employed
in the human resources department of the U.S. Postal Service.
During the taxable years at issue, petitioners also were engaged
in other businesses. Preston was engaged in a hauling activity,
which consisted primarily of trash removal, light hauling, and
yard cleaning. Ruby was engaged in the retail sales of beauty
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