R. Paul Kropp - Page 2

                                         - 2 -                                          

                                     Additions to Tax            Penalty               
           Petitioner    Deficiency     Sec. 6651(a)  Sec. 6654 Sec. 6652               
           R. Paul Kropp $36,135    $8,797.50    $1,848.30           –-                 
          Lorna B. Kropp      9,596 –-         –-             $1,919                    
               Unless otherwise noted, all section references are to the                
          Internal Revenue Code in effect for the year in issue, and all                
          Rule references are to the Tax Court Rules of Practice and                    
               After concessions,1 we must decide:  (1) Whether $81,000                 
          withdrawn from a joint checking account (joint account) by one of             
          the petitioners is considered taxable compensation for services               
          rendered or a nontaxable gift, (2) whether petitioners are liable             
          for self-employment tax on account of the $81,000 withdrawal, and             
          (3) whether the additions to tax and accuracy-related penalty                 
                                   FINDINGS OF FACT                                     
               The stipulation of facts, the second stipulation of facts,               
          and the attached exhibits are incorporated herein by reference.               
          At the time R. Paul Kropp (hereinafter Paul) and Lorna B. Kropp               

               1  The parties stipulate that during 1994, R. Paul Kropp                 
          (hereinafter Paul) received the following income:  Capital gains              
          of $1,369, dividends of $1,646, interest of $214, and rent of                 
          $12,000.  The parties also stipulate that during 1994, Lorna B.               
          Kropp (hereinafter Lorna), Paul’s wife, earned wages of $12,549.              
          Respondent argues that pursuant to applicable community property              
          laws, Paul and Lorna must each report one-half of the couple’s                
          combined income.  Petitioners do not contest respondent’s                     
          position.  We therefore find that petitioners concede this issue.             
          See Petzoldt v. Commissioner, 92 T.C. 661, 683 (1989).                        

Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011