Joseph J. House - Page 3




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               Joseph J. House Inc., docket No. 8665-98                               
          Year ended     Addition to tax   Accuracy-related penalty                   
          June 30    Deficiency  Sec. 6651(a)(1)         Sec. 6662(a)                 
          1994       $39,723        $9,931             $7,945                         
               By amendment to answer in docket No. 8664-98, respondent               
          affirmatively asserted that petitioner was liable for an                    
          increased deficiency in tax and that petitioner was liable for              
          the fraud penalty.1  On brief, respondent conceded the deficiency           
          in tax, addition to tax, and accuracy-related penalty in docket             
          No. 8665-98.  Following concessions of the parties, we decide the           
          following issues:                                                           
               1.  Whether petitioner had unreported income for 1994                  
          related to his accounting business.  We hold he did to the extent           
          set forth herein.                                                           
               2.  Whether petitioner is liable for the fraud penalty.  We            
          hold he is.                                                                 
               Unless otherwise indicated, section references are to                  
          applicable provisions of the Internal Revenue Code, Rule                    
          references are to the Tax Court Rules of Practice and Procedure,            
          and dollar amounts are rounded.                                             



               1Respondent asserted in his amendment to answer that                   
          petitioner failed to report $156,197 in gross receipts instead of           
          $77,550 as determined in the notice of deficiency, and he                   
          asserted that the entire deficiency resulting therefrom was                 
          attributable to fraud.  Respondent did not set forth a specific             
          dollar amount for the increased deficiency or the fraud penalty,            
          stating that the amounts were computational.                                




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