Roy J. and Helen Cole - Page 2

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          section 6654(a)1 in the amount of $1,719.60, and an accuracy-               
          related penalty under section 6662(a) in the amount of $6,342.80.           
               After concessions, the issues for decision are:  (1) Whether           
          for 1995 petitioners are entitled to certain deductions related             
          to petitioner's home office.  We hold they are not.  (2) Whether            
          for 1995 petitioners are liable for the accuracy-related penalty            
          pursuant to section 6662(a).  We hold they are.                             
               Some of the facts have been stipulated and are so found.               
          The stipulated facts and the accompanying exhibits are                      
          incorporated herein by this reference.  At the time the petition            
          in this case was filed, petitioners resided in Edmonds,                     
                                  FINDINGS OF FACT                                    
               Petitioner has been in the floor covering business since               
          1962.  Each morning petitioner spends approximately 1 hour in his           
          home office contacting customers, builders, and suppliers.  When            
          petitioner returns home at night, he spends a few more hours in             
          his home office preparing various paperwork and returning calls             
          to people who left messages on his answering machine during the             

               1All section references are to the Internal Revenue Code in            
          effect for the taxable year in issue, and all Rule references are           
          to the Tax Court Rules of Practice and Procedure, unless                    
          otherwise indicated.  References to petitioner are to Roy J.                

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