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1990; (4) whether petitioner failed to report sales and rental
income she received during 1989 and 1990; (5) whether petitioner
may deduct business expenses in excess of those allowed by
respondent for 1989 and 1990; (6) whether respondent properly
reconstructed petitioner’s 1991 and 1992 taxable income through
the use of Bureau of Labor Statistics data; (7) whether
petitioner is liable for the additions to tax under section
6651(f) or, in the alternative, for the additions to tax under
section 6651(a) for the years at issue; and (8) whether
petitioner is liable for the additions to tax under section
6654(a) for the years at issue.
FINDINGS OF FACT
Petitioner Zabetti A. Pappas was a resident of New York, New
York, at the time the petition herein was filed. She did not
file Federal income tax returns for the taxable years at issue,
nor did she make estimated tax payments for those years.
1. Petitioner and Real Services, Inc.
Petitioner attended Vassar College from 1976 through
approximately 1978. Thereafter, she held a variety of jobs,
including operating a business known as “Disco Queen”. She was
known to her associates and clientele in New York as “Z” or
“Betty” or “Angel”. Petitioner was actively involved in a number
of income-producing activities. She operated a prostitution
business, in which she arranged for other women or herself to
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