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Respondent determined a deficiency in petitioner’s Federal
income tax for the taxable year 1994 in the amount of $2,011 and
an addition to tax of $503 pursuant to section 6651(a)(1).
Some of the facts in this case have been stipulated and are
so found. The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioner lived in Mechanicsburg, Pennsylvania.
In the notice of deficiency, respondent determined that
petitioner: (1) Failed to report $12,255 of income which was
subject to self-employment tax; (2) failed to report a 1993 State
of Virginia income tax refund of $410; (3) failed to report
dividend income of $75; (4) failed to report interest income of
$185; and (5) was subject to an addition to tax of $503 pursuant
to section 6651(a)(1) for failure to file the return by the
prescribed due date.
In the Stipulation of Facts, petitioner conceded that the
income tax refund, dividend income, and interest income, which
collectively totaled $670, are includable in income for the year
at issue. In addition, respondent conceded that credit card
advances totaling $1,862 that were initially included in the
unexplained bank deposits of $12,255 are not includable in
income. Therefore at trial, only $10,393 of unexplained bank
deposits treated as unreported business income is at issue.
After the above-mentioned concessions, the remaining issues
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