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Respondent determined a deficiency in petitioners' Federal
income tax for 1992 in the amount of $4,141, as well as an
accuracy-related penalty under section 6662(a) in the amount of
$828. At trial, respondent asserted an increased deficiency and
accuracy-related penalty in the amounts of $6,393 and $1,278,
respectively. As discussed in further detail in this opinion,
petitioners concede a portion of the increased deficiency.
After concessions by the parties, the issues for decision
are:
(1) Whether petitioners failed to report self-employment
income in the amount of $16,727. We hold that petitioners failed
to report $14,191 of self-employment income.2
(2) Whether petitioners are entitled to certain Schedule C
deductions. We hold that they are to the extent provided in the
opinion.
(3) Whether petitioners are liable for the accuracy-related
penalty under section 6662. We hold that they are to the extent
provided in the opinion.
FINDINGS OF FACT
Some of the facts have been stipulated, and are so found.
Petitioners resided in Charlotte, North Carolina, at the time
that their petition was filed with the Court.
2 The disputed amount of unreported self-employment income
is in addition to $14,180 of unreported self-employment income
conceded by petitioners to have been received by Mrs. Margolis.
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