- 2 -
Respondent determined deficiencies of $5,354, $14,599, and
$6,159 in petitioner’s Federal income taxes for 1994, 1995, and
1996, respectively, a $21 addition to tax under section
6651(a)(1) for 1995, and accuracy-related penalties under section
6662(a) in the amounts of $1,070.80, $2,919.80, and $1,231.80,
respectively, for the years at issue.
The issues for decision are: (1) Whether petitioner’s gold
mining activity was an activity not engaged in for profit under
section 183(a) during the years in question; (2) whether
petitioner is entitled to certain deductions attributable to the
activity; (3) whether petitioner is liable for an addition to tax
under section 6651(a)(1) for 1995; and (4) whether petitioner is
liable for accuracy-related penalties under section 6662(a) for
1994, 1995, and 1996.2
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and are made part hereof.
Petitioner’s legal residence at the time the petition was filed
was Georgetown, California.
During the years at issue, petitioner worked as a deck
engineer and hydraulic equipment operator for a dredging and
2 Numerous other issues were settled by the parties both
prior to and during trial involving a child care tax credit, a
cost of goods sold deduction, certain unreimbursed employee
business expenses, the amount of applicable self-employment tax,
and amounts allowable on Schedule C, Profit or Loss From
Business, as expenses relating to the business activity at issue.
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