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Additions to Tax and Penalties
Sec. Sec. Sec. Sec.
Year Deficiency 6653(b)(1)(A) 6653(b)(1)(B) 6653(b) 6663
1987 $59,943 $44,957 * -- --
1988 53,843 -- -- $40,382 --
1989 55,476 -- -- -- $41,607
1990 47,368 -- -- -- 35,526
1991 2,842 -- -- -- 2,132
* 50 percent of the interest due on $59,943.00 for the taxable
year 1987.
Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the years in issue, and all
Rule references are the Tax Court Rules of Practice and
Procedure.
After concessions,1 the remaining issues for decision are:
(1) Whether petitioners failed to report income from petitioner
Manuel Karcho's wholly owned S corporation of $143,552 for 1987,
$149,458 for 1988, $160,600 for 1989, $137,976 for 1990, and
$21,603 for 1991; (2) whether petitioners are liable for
additions to tax for fraud for 1987 and 1988, and for fraud
penalties for 1989, 1990, and 1991; and (3) whether the period of
1 Respondent concedes decreases in the deficiencies of
$21.10 for 1988, $916.73 for 1989, and $733.00 for 1991.
Petitioners concede that they failed to report gross receipts
from the sale of soft drinks, candy, and miscellaneous items of
$16,428.50 for 1987, $21,230.90 for 1988, $14,241.27 for 1989,
and $9,269.70 for 1990. Respondent concedes that petitioners are
entitled to additional costs of goods sold with respect to these
sales of $9,630.25 for 1987, $11,892.45 for 1988, $8,529.64 for
1989, and $5,981.85 for 1990.
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