Thomas S. Russo - Page 5




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               Petitioner filed his 1996, 1997, and 1998 Federal income tax           
          returns on January 30, 24, and 30 of 2001, respectively.  Before            
          respondent received the returns, respondent had prepared                    
          substitute returns for those years pursuant to section 6020(b).             
          On the basis of the substitute returns, respondent issued three             
          notices of deficiency to petitioner, each dated January 22, 2001,           
          for the taxable years 1996, 1997, and 1998.  Respondent                     
          determined deficiencies and additions to tax under sections                 
          6651(a)(1), (2), and 6654(a) for all 3 years.  The deficiencies             
          differed from the amounts shown as the tax on the respective                
          returns that petitioner later submitted.  Prior to trial,                   
          respondent and petitioner stipulated that the amounts shown as              
          the tax on the returns that petitioner submitted were the correct           
          amounts.  The parties further stipulated that petitioner’s                  
          correct tax liabilities for 1996 and 1997 ($9,147 and $7,099,               
          respectively) were not fully paid until petitioner filed the                
          returns for those years on January 30 and January 24, 2001,                 
          respectively, and that petitioner’s correct tax liability for               
          1998 ($35,119) had not been paid in full on the date the case was           
          called for trial.                                                           
                                     Discussion                                       
               Section 6651(a)(1) imposes an addition to tax for a                    
          taxpayer’s failure to file a required return on or before the               
          specified filing date, including extensions.  The amount of this            
          addition to tax is 5 percent of the tax required to be shown on             





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