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In 1995, Curtis Shirley personally performed computer
consulting services for Ventana. In December 1995, checks
totaling $2,470 were issued by Ventana for those services, made
out to “C.E. Shirley”, which checks were cashed by Curtis E.
Shirley. On brief, respondent states the issue as whether the
C. Shirleys understated their 1995 Form 1040 Schedule C
(business) gross receipts by $2,470. The item in question is an
item of gross income, either as compensation for services or as
business gross receipts. See sec. 61(a)(1) and (2). The
C. Shirleys failed to report it on the C. Shirleys’ 1995 return.
The endorsement on the two checks in evidence reads “Curtis E.
Shirley”, without any qualification, which is consistent with the
named payee: “C.E. Shirley”. Notwithstanding some ambiguity as
to the identity of the payees (Curtis E. Shirley or the
C E Shirley Trust), we infer from that endorsement that the
checks were payable to Curtis E. Shirley. We find that he
omitted from gross income $2,470 on account thereof.
B. Penalties
1. Section 6662(a)
Respondent determined a section 6662(a) penalty against the
C. Shirleys in language identical to that used with respect to
the J. Shirleys, except for the amount of the penalty. On brief,
the C. Shirleys, like the J. Shirleys, fail to address that
penalty. Our analysis is the same with respect to the
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