- 2 -
year in issue, and all Rule references are to the Tax Court Rules
of Practice and Procedure.
The sole issue for decision is whether petitioners are
entitled to various business expense deductions disallowed by
respondent.1 Petitioners resided in Sacramento, California, on
the date the petition was filed in this case.
During the year in issue, petitioner husband (petitioner)
received compensation of $31,358 from the United States Postal
Service and $800 from Zears Painting & Decorating, Inc. He also
received nonemployee compensation of $9,445 from Zears.
Petitioner wife received nonemployee compensation of $1,200 from
Joell’s Graphics. Also during this year, petitioners were
involved with Olray Corporation, which was engaged in motorcycle
repair. A Federal income tax return was filed for this
corporation for taxable year 1996, reporting gross receipts or
sales of $50,262 and a loss of $28,861. No compensation was
reported as paid to officers or employees on the corporation’s
return.
1Respondent concedes the disallowance of a $5,589 itemized
deduction for casualty and theft losses. The applicability of
the sec. 6651(a)(1) addition to tax for failure to timely file a
return was not raised by petitioners as an issue either in the
petition or at trial. We note, however, that the record supports
respondent’s assertion of the addition to tax because the return
was signed on April 10, 1998, and stamped received by the IRS on
May 8, 1998. All of the adjustments otherwise unaddressed
(including the correct amount of the addition to tax) are
computational and will be resolved by the Court’s holding on the
issue in this case.
Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011