Rolf E. Polentarutti - Page 2

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               Respondent determined that petitioner received $258,542 in             
          unreported income in 1989 but now concedes that the amount is               
          $218,542.  Petitioner contends that $200,000 of this amount was             
          nontaxable.  After concessions, we must decide:                             
               1.   Whether $200,000 petitioner received in wire transfers            
          from investors and used for personal purposes in 1989 is taxable            
          as income to him.  We hold that it is.                                      
               2.   Whether petitioner is liable for the addition to tax              
          under section 6651(a)(1) for failure to timely file his 1989                
          income tax return.  We hold that he is.                                     
               3.   Whether petitioner is liable for the accuracy-related             
          penalty under section 6662(a) for negligence.  We hold that he              
          is.                                                                         
               Section references are to the Internal Revenue Code.  Rule             
          references are to the Tax Court Rules of Practice and Procedure.            
                                I.  FINDINGS OF FACT                                  
               Some of the facts have been stipulated and are so found.               
          A.   Petitioner                                                             
               Petitioner lived in Merritt Island, Florida, when he filed             
          his petition in this case.                                                  
          B.   Petitioner's Business Activities                                       
               In 1989, petitioner developed real estate through various              
          entities, including partnerships, corporations, joint ventures,             
          and sole proprietorships.  World Golf & Tennis, Ranches of                  
          Daytona Beach, and Wildbahn and Clam were three of his projects             




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