Nelson J. and Victoria A. Secretario - Page 2

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               After concessions, the issues remaining for decision are:              
          (1) Whether petitioners are liable for self-employment tax on the           
          net self-employment income earned by Mr. Secretario during 1994;            
          and (2) whether petitioners are liable for an accuracy-related              
          penalty pursuant to section 6662(a).                                        

                                  FINDINGS OF FACT                                    

               Some of the facts have been stipulated and are so found.               
          The stipulation of facts is incorporated herein by this                     
          reference.  At the time the petition was filed, petitioners                 
          resided at Kapaa, Hawaii.                                                   
               During 1994, Mr. Secretario was self-employed as an                    
          insurance salesman doing business as "Planning Concepts".  For              
          the taxable year 1994, petitioners timely filed their joint                 
          Federal income tax return with respondent's Fresno, California,             
          Service Center.  On Schedule C, Profit or Loss From Business, Mr.           
          Secretario reported income and expenses from his insurance sales            
          as a sole proprietorship.                                                   
               In the notice of deficiency dated February 26, 1997,                   
          respondent determined that petitioners underreported gross                  
          receipts on Schedule C of their 1994 joint return in the amount             
          of $3,743.  Subsequent to the issuance of the notice of                     


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