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manager for the Robinsons’ relatively extensive real estate
activity, she nonetheless devoted significant time and effort to
her Career responsibilities.
The Robinsons, in their 1992 and 1993 returns, reported
income from property management, cancellation of indebtedness,
and, in 1992, $10,101 of net earnings from self employment. The
self-employment income was attributable to Mr. Robinson’s
management consulting income in the gross amount of $10,938.
Respondent also determined that the Robinsons were liable
for section 6662(a) accuracy-related penalties for their 1992 and
1993 tax years. In particular, the penalties were determined for
the substantial understatement of tax under section 6662(b)(2)
and (d).
Respondent also issued notices of deficiency to Career for
its fiscal years ended July 31, 1993 and 1994, and Pak West for
its fiscal year ended September 30, 1994. With respect to
Career, respondent determined adjustments regarding items of
business income, expenses, and net operating losses, and that the
corporation was liable for accuracy-related penalties under
section 6662(b) and (d). Similarly, as to Pak West, respondent
disallowed various business expenses and also determined that the
corporation was liable for the accuracy-related penalty under
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