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pursuant to section 6651(a)(1); and (4) whether petitioner is
liable for a penalty pursuant to section 6673.
Background
During 1991, petitioner was employed as a veterinarian by
Stephen W. Williams P.C., an S corporation (Williams P.C.).
Petitioner received extensions of time for filing his 1991 income
tax return until October 15, 1992.
On October 1, 1994, petitioner mailed a Form 1040 for 1991
to the Internal Revenue Service (IRS). Petitioner altered the
Form 1040 (altered 1040) by marking through the captions on lines
7 and 18 and typing his own caption, “Non Taxable Compensation”.
Petitioner reported income of $20,500 and $135,861 on lines 7 and
18, respectively. Next, petitioner whited out the captions on
lines 24a and b and typed in “Non Taxable Compensation Eisner v.
Macomber 252 U.S. 189". Petitioner reported a deduction of
$156,861 on line 24a, which brought his adjusted gross income to
$0. Petitioner did not sign the altered 1040.
The IRS treated the altered 1040 as a frivolous return under
section 6702 and fined petitioner $500. Petitioner stipulated
that the altered 1040 was a frivolous return and not a return
within the meaning of section 6501(a).
On November 21, 1996, petitioner mailed another Form 1040
(disclaimer 1040) for 1991 to the IRS. On the disclaimer 1040,
petitioner reported adjusted gross income of $150,852 consisting
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