S. Robert Davis - Page 2




                                        - 2 -                                         

                                Additions to Tax                                      
          Year      Deficiency     Sec. 6653(b)   Sec. 6653(b)(1)   Sec. 6653(b)(2)   Sec. 6661
          1976      $263,353.75     $131,676.88          --                --             --
          1984        20,255.00         --            $10,113               1           $5,056
          1985       244,848.00         --               --                --             --
          1987        24,986.00         --               --                --             --
               1  50 percent of the interest on $20,255.                              
                                                                                     
          Respondent also determined that increased interest pursuant to              
          section 6621(d) applied to the 1976 deficiency.                             
               By three amendments to answer for the year 1985, respondent            
          (1) increased the deficiency by $367,776 (resulting in a total              
          deficiency of $612,624), (2) asserted additions to tax pursuant             
          to (a) section 6653(b)(1) in the amount of 50 percent of the                
          underpayment, (b) section 6653(b)(2) in the amount of 50 percent            
          of the interest payable with respect to the deficiency                      
          attributable to fraud, and (c) section 6659 in the amount of                
          $94,950, and (3) asserted increased interest pursuant to section            
          6621(d).                                                                    
               Unless otherwise indicated, all section references are to              
          the Internal Revenue Code in effect for the years in issue, and             
          all Rule references are to the Tax Court Rules of Practice and              
          Procedure.  After concessions, the primary issues for decision              
          are as follows:                                                             
               (1) Whether petitioner is liable for additions to tax for              
          fraud for 1976, 1984, and 1985;                                             










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