T.C. Memo. 2001-130
UNITED STATES TAX COURT
JOSEPH A. AND CAROL DELVECCHIO, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6533-94. Filed June 6, 2001.
Petitioner H was the sole proprietor of a
business, A. Ps, H and W, filed original joint returns
and, subsequently, amended tax returns for the tax
years 1987 and 1988. R determined deficiencies and
additions to tax against Ps based on Ps’ failure to
report on the original returns all gross income from A
and all capital gain from the sale of real property.
1. Held: Each of Ps’ amended returns is an
admission of a tax underpayment.
2. Held, further, P-H is liable under sec.
6653(b)(1)(A), I.R.C., for 1987 and sec. 6653(b)(1),
I.R.C., for 1988 for the addition to tax for fraud on
the portion of the underpayment attributable to the
failure to report all gross income from A.
3. Held, further, to the extent we have
determined there to be an underpayment of tax
attributable to fraud, the addition to tax under sec.
6653(b)(1)(B), I.R.C., shall apply for 1987.
4. Held, further, Ps are liable for the addition
to tax for substantial understatement under sec. 6661,
I.R.C., for 1987 and 1988.
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