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Additions to Tax1 Penalties1
Year DeficiencySec. 6653(b)Sec. 6653(b)(1)(A)Sec. 6653(b)(1)(B) Sec. 6663
19873 $9,703 -- $7,278 2 --
1988 8,833 $6,625 -- -- --
19893 8,488 -- -- -- $6,366
19903 4,892 -- -- -- 3,669
1 The additions to tax and the penalties apply only to petitioner Edward Drozdowski.
2 Fifty percent of the statutory interest due on $9,703, computed from Apr. 15, 1988,
to the earlier of the date of assessment or the date of payment.
3 Respondent concedes that $425, $1,114, and $655 of the income adjustments in the
notice of deficiency for 1987, 1989, and 1990, respectively, are not gross income
to petitioners.
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.
The issues for decision are whether petitioners have failed to
report wage income relating to 1987, 1988, 1989, and 1990, and
whether Mr. Drozdowski is liable for additions to tax, and
penalties, for fraud.
FINDINGS OF FACT
Petitioners, husband and wife, resided in Boca Raton, Florida,
at the time their petition was filed. Prior to the years in
issue, Mr. Drozdowski served 20 years in the United States Air
Force and was employed by various businesses. His previous
employers withheld taxes from his wages and issued him Forms W-2,
Wage and Tax Statements. During the years in issue, Mr.
Drozdowski was an employee of Continental Plastic Card Co. (CPC),
and earned wages and bonuses totaling $28,425 in 1987, $31,525 in
1988, $34,075 in 1989, and $16,800 in 1990. At Mr. Drozdowski's
request, CPC did not withhold income tax from, and did not issue
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