Howard Howe and Janice Howe - Page 7




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          taxpayer’s method of accounting.  Petitioners contend that “It              
          logically follows that a lump-sum payment to procure a lease in a           
          time-sensitive context should be deductible as well.”  We need not          
          decide this point because we are not convinced that petitioner              
          prepaid rent in 1992 to obtain a lease in 1994 and 1995.                    
               We conclude that petitioners may not deduct the rent                   
          petitioner prepaid in 1992.                                                 
          B.   Whether, Under the Mitigation Rules, Petitioners May Deduct            
               Rental Expense for 1993 and 1994 Which Petitioner Prepaid in           
               1992                                                                   
               Petitioners contend that, if they may not deduct rent they             
          prepaid in 1992, then they may deduct it in 1993 and 1994 under             
          sections 1.1314(a)-1 through 1.1314(c)-1, Income Tax Regs. (which           
          relate to the mitigation provisions, sections 1311 through 1314).           
               We disagree.  We lack jurisdiction to redetermine a taxpayer’s         
          tax liability in years for which the Commissioner has not issued a          
          notice of deficiency.  See secs. 6213(a) and 6214(a) and (b).  The          
          only notice of deficiency petitioned in this case is for 1992.              
          Thus, we lack jurisdiction to decide petitioners’ tax liability for         
          1993 and 1994.                                                              
          C.   Whether Petitioners Are Liable for the Addition to Tax Under           
               Section 6651(a) for Failure To Timely File a Return                    
               Respondent determined and contends that petitioners are liable         
          for the addition to tax under section 6651(a) for failure to timely         
          file their income tax return for 1992.  A taxpayer may be liable            
          for an addition to tax of up to 25 percent for failure to timely            





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