U.R. Neely - Page 3




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            employees of the company for purposes of Federal employment                                
            taxes3 under Subtitle C (Employment Taxes and Collection of                                
            Income Tax) of the Internal Revenue Code.  The notice of                                   
            determination further provided that petitioner was not entitled                            
            to “safe harbor” relief provided by section 530 of the Revenue                             
            Act of 1978, Pub. L. 95-600, 92 Stat. 2763, 2885.  Respondent                              
            attached to the notice of determination a “Preliminary                                     
            Calculation of tax and additions to tax”, which set forth the                              
            following amounts:  (1) $20,154 for January 1 to December 31,                              
            1992, under the Federal Insurance Contributions Act (FICA), ch.                            
            736, secs. 3101-3128, 68A Stat. 415 (1954), and under the income                           
            tax withholding provisions of sections 3401-3406; (2) $13,060 for                          
            January 1 to December 31, 1992, under the Federal Unemployment                             
            Tax Act (FUTA), ch. 736, secs. 3301-3311, 68A Stat. 439 (1954);                            
            (3) $1,743 in section 6656 penalties for failure to make timely                            
            deposits of taxes; and (4) $24,911 in section 6663 fraud                                   
            penalties.                                                                                 
                  On September 8, 1998, petitioner filed with the Court a                              
            petition seeking our review of the notice of determination.4  In                           


                  3  For convenience, we use the term “employment taxes” to                            
            refer to taxes under the Federal Insurance Contributions Act                               
            (FICA), ch. 736, secs. 3101-3128, 68A Stat. 415 (1954), the                                
            Federal Unemployment Tax Act (FUTA), ch. 736, secs. 3301-3311,                             
            68A Stat. 439 (1954), and income tax withholding, secs. 3401-                              
            3406.                                                                                      
                  4  The petition was actually filed by petitioner and                                 
            petitioner’s wife, Anne Neely.  On May 14, 1999, respondent filed                          
                                                                         (continued...)                




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