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interest ($794), dividends ($723), and taxable individual
retirement account distributions ($29,935). Petitioner
erroneously believed that his claimed Schedule C business expense
deductions and his alleged net operating carryover losses from
1990 and 1991 reduced his reported gross income for 1992 below
$5,900. These amounts reduce "taxable income" under section
63(a), but do not reduce "gross income" under section 61(a).
See, e.g., sec. 61(a)(2); sec. 1.61-3(a), Income Tax Regs. (gross
income derived from business determined "without subtraction of
selling expenses, losses or other items not ordinarily used in
computing costs of goods sold"). Thus, petitioner's reported
gross income for 1992 exceeded the section 6012(a)(1)(A)(i)
threshold for filing a return.3
Petitioner's return for his 1992 taxable year was due on
April 15, 1993. Sec. 6072(a). Respondent received petitioner's
1992 return at his Ogden, Utah, service center on August 10,
1994. In light of the fact that he is a certified public
accountant, we find that petitioner's failure to understand the
basic term "gross income" does not constitute reasonable cause
for not timely filing his return. Accordingly, we hold that
petitioner is liable for the section 6651(a)(1) addition to tax.
3 We note that petitioner's actual gross income for 1992
is greater than his reported gross income as a result of the
computational adjustment to the taxable amount of his Social
Security benefits under sec. 86.
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