Dean L. and Cynthia D. Sanders - Page 2




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                      MEMORANDUM FINDINGS OF FACT AND OPINION                        

               HALPERN, Judge:  By notice of deficiency dated September 10,           
          1996, respondent determined deficiencies in petitioners' Federal            
          income taxes and accuracy-related penalties as follows:                     
                                        Accuracy-related penalty                      
               Year      Deficiency     Sec. 6662(a)                                  
               1992      $74,903             $14,981                                  
               1993      121,151             24,230                                   
               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.                                                                  
               The issues for decision are:  (1) Whether petitioner Dean L.           
          Sanders' Schedule F activity constituted an activity not engaged            
          in for profit within the meaning of section 183(a), and                     
          (2) whether petitioners are liable for section 6662(a) accuracy-            
          related penalties on account of negligence or disregard of rules            
          or regulations.1                                                            









          1    On brief, petitioners also raise certain issues that depend            
          on our finding that petitioner Dean L. Sanders' Schedule F                  
          activity was engaged in for profit.  Since we do not make that              
          finding, we need not address those additional issues.                       




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