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Additions to Tax and Penalties
Year Deficiency Sec. 6653(b)(1)(A) Sec. 6653(b)(1)(B) Sec. 6653(b)(1) Sec. 6663
1986 $25,086 $18,815 * --- ---
1987 20,122 15,092 * --- ---
1988 26,970 --- --- $20,228 ---
1989 44,426 --- --- --- $33,320
1990 62,817 --- --- --- 47,113
1991 38,498 --- --- --- 28,874
* Amounts to be calculated at 50 percent of interest
due on portion of underpayments attributable to fraud.
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 involve the amount of embezzled
funds that should be charged as gross income to petitioner and
whether the fraud additions to tax and fraud-related penalties
apply.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
When the petition was filed, petitioner resided in South
Jordan, Utah. From 1984 until terminated in 1991, petitioner was
employed as a pharmacist at the outpatient pharmacy (OPP) at LDS
Hospital in Salt Lake City, Utah.
The procedures for the “closing” each day of the cash
register by the OPP pharmacists consisted of the following steps:
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