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Addition to Tax Penalties
Year Deficiency Sec. 6651(a)(1) Sec. 6662(a) Sec. 6663
1991 $3,759 -– $751.80 --
1992 162,222 $23,343.45 5,393.40 $101,441.25
1993 112,951 26,206.25 4,181.00 69,034.50
1994 26,337 2,082.50 2,505.00 10,359.00
The adjustments contained in the notice of deficiency
resulted primarily from respondent's determination that:
(1) Petitioners were not entitled to deduct losses claimed
in 1991, 1992, 1993, and 1994 from Diplomat Associates, an Ohio
general partnership (the Diplomat issue).
(2) Petitioners failed to report in 1992, 1993, and 1994
substantial amounts of income from "illegal means" (the omitted
income issue).
(3) Petitioners were not entitled to deduct a net operating
loss from the O'Bryon Co. reported on Schedules E, Supplemental
Income and Loss, of their 1992, 1993, and 1994 returns (the
Schedule E issue).
(4) Petitioners were not entitled to deduct certain expenses
reported on Schedules C, Profit or Loss From Business, of their
1991 and 1992 returns (the Schedule C issue).
(5) Petitioners' itemized deductions should be reduced each
year because of the increase in their adjusted gross income each
year.
In the notice of deficiency, respondent determined that
Phillip (but not Cyndie) was liable for the civil fraud penalty
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Last modified: May 25, 2011