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Taxable Income Tax Additions to Tax
Year Deficiency Sec. 6651(a)(1) Sec. 6654
1989 $8,964.00 $2,241.00 $604.00
1990 7,867.00 1,966.75 516.00
1991 8,190.00 2,047.50 470.00
Respondent’s determinations were based in large part upon Forms
1099 filed by various third-party payors, which forms respondent
alleges indicated that petitioner operated a drywall installation
business. Respondent also determined that petitioner received
additional income for each year not reported on Forms 1099
through application of tables produced by the U.S. Department of
Labor, Bureau of Labor Statistics. These adjustments were
explained in the notice as follows:
Based on statistical information from the U.S.
Department of Labor, we have established amounts of
personal living expenses and amounts of income needed
to pay for those expenses. Since your income was not
sufficient to pay for all of your personal living
expenses, we have adjusted your income accordingly.
Petitioner thereafter on July 29, 1994, filed delinquent
Forms 1040 for 1989 through 1991. These returns each reflected
the same Newport Beach address to which the notice of deficiency
had been sent and included a Schedule C, Profit or Loss From
Business, for “Drywall Installation”, “DRYWALL INSTALLER”, or
“DRYWALL CONTRACTOR”. The Forms 1040 and Schedules C showed
gross receipts, interest, and a State income tax refund in
amounts identical to those shown in the Forms 1099 received by
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Last modified: May 25, 2011