Bruce David Cohen - Page 20




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               Section 6012(a)(1)(A) further delineates that an individual            
          is required to file a tax return for any year in which his or her           
          gross income exceeds the sum of the applicable exemption amount             
          and standard deduction for such taxpayer.  In this context, gross           
          income includes “Gross income derived from business”, sec.                  
          61(a)(2), which in turn is defined as “total sales, less the cost           
          of goods sold,” plus certain other items, sec. 1.61-3(a), Income            
          Tax Regs.  Business expenses, as distinct from cost of goods                
          sold, are not subtracted in ascertaining gross business income.             
          Id.                                                                         
               Here, petitioner did not file tax returns for 1986, 1988,              
          1989, 1990, 1991, and 1992 until October of 1998.  Such returns             
          were untimely by a large margin.  See sec. 6072(a).  Furthermore,           
          the returns, even as filed, reflect substantial gross income                
          derived from Bicycle Sport and thus clearly place petitioner over           
          the filing threshold.                                                       
               Petitioner, however, has fallen far short of establishing              
          reasonable cause for his repeated failure to file timely tax                
          returns.  Other than vague references to loss of records and                
          perhaps the misguided belief that he owed no taxes, petitioner              
          has not offered any explanation for his delinquency.  We                    
          therefore hold that petitioner is liable for the section                    
          6651(a)(1) addition to tax for each of the taxable years at                 
          issue.                                                                      






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