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(4) Whether petitioner is liable for additions to tax under
section 6651(a)(1) for all years at issue except 1989.3 We hold
that she is.
Some of the facts have been stipulated and are so found. At
the time of filing the petition, petitioner resided in
Middleburg, Virginia.
During the years at issue, petitioner was the sole
shareholder of Bankers Mortgage Group, Inc. (Bankers Mortgage), a
corporation engaged in the business of arranging mortgages and
selling real estate.
Prior to receiving the statutory notice of deficiency,
petitioner had not filed Federal income tax returns for her 1988,
1989, 1992, 1993, or 1994 tax years. Respondent prepared
substitute tax returns for each of these years based on
information returns received from third parties and issued a
statutory notice of deficiency on April 22, 1996, covering each
of the foregoing years.
Issue 1. 1988 Nonemployee Compensation
On the basis of Forms 1099 he received, respondent
determined that petitioner received nonemployee compensation of
$120,200 during 1988. Petitioner admits she received payments
totaling $119,581 from Bankers Mortgage during 1988. She claims,
3 Respondent concedes that petitioner is not liable for a
sec. 6651(a)(1) addition to tax for 1989 because petitioner’s
prepayment credits exceeded her tax liability for that year.
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