- 42 -
Year
1984 1985 1986 1987 1988
Net amount
per CD Sch. $1,575,000 $1,161,163 $1,752,537 $1,708,500 $1,525,300
Less:
Invoices
dated after
8/88 -0- -0- -0- -0- 155,300
Interest
paid to CD
participants 304,864 282,452 406,917 484,548 -0-
Lesser of
W-2 wages or
FIP's NOL 251,665 233,033 532,201 395,810 122,067
Unreported
income 1,018,471 645,678 813,419 828,142 1,247,933
For each of the years 1984 through 1987, the unreported income
exceeds 25 percent of the income reported on the return.
Accordingly, we conclude that for each of those years the statute
of limitations does not bar the assessment of the deficiency or
additions to tax.
Addition to Tax for Negligence
Respondent determined that petitioners are subject to an
addition to tax for negligence under section 6653 for the years
in issue.
Section 6653(a)(1) (for 1984, 1985, and 1988) or section
6653(a)(1)(A) (for 1986 and 1987) imposes an addition to tax
equal to 5 percent of the underpayment if any part of the
deficiency was due to negligence or intentional disregard of
rules or regulations. Section 6653(a)(2) (for 1984 and 1985) or
section 6653(a)(1)(B) (for 1986 and 1987) provides for an
addition to tax in the amount of 50 percent of the interest
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