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Respondent determined deficiencies in petitioners' 1995 and
1996 Federal income taxes in the amounts of $2,209 and $2,591,2
respectively. Respondent also determined an accuracy-related
penalty under section 6662(a) for 1995 in the amount of $442. At
the time the petitions were filed, petitioners resided in Forest
Hill, Maryland.
The issues are whether petitioners are entitled to
miscellaneous deductions in excess of those allowed by respondent
for 1995, whether wages received by petitioner(s) in 1995 and
1996 are taxable, and whether petitioners are liable for an
accuracy-related penalty pursuant to section 6662(a) for 1995.
The facts may be summarized as follows. During the years in
issue, petitioner Richard J. Sinsigalli was employed by Frederick
Ward Associates as a design engineer. For the taxable year 1995,
petitioners filed a joint Federal income tax return in which they
claimed itemized deductions in the amount of $31,332.3 Upon
examination, respondent disallowed $16,221 claimed as
miscellaneous deductions.
For the taxable year 1996, petitioners submitted a Form 1040
with "0.00" shown for their income and deductions. Petitioners
2 The first page of the notice of deficiency for 1996
reflects a deficiency in the amount of $2,951. This apparently
was due to a transposition error. The computation page of the
notice shows a deficiency amount of $2,591, and, at trial,
respondent verified that the lower amount was correct.
3 Figures are rounded to the nearest dollar.
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Last modified: May 25, 2011