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of law. Accordingly, we shall grant respondent’s motion for
summary judgment, as supplemented.
Background
On May 9, 1997, and June 18, 1998, petitioners submitted to
respondent joint Forms 1040, U.S. Individual Income Tax Return,
for 1996 and 1997, respectively. Petitioners entered zeros on
every line of the income sections of the Forms 1040, specifically
including line 7 for wages and line 22 for total income.
On August 6, 1999, respondent issued a joint notice of
deficiency to petitioners determining a deficiency of $27,771 in
their Federal income tax for 1996 and an accuracy-related penalty
under section 6662(a) of $5,551.40. The deficiency was based on
respondent’s determination that petitioners failed to report
nonemployee compensation, interest income, and a distribution
from a retirement account as reported to respondent by third-
party payors on Forms 1099.
On August 6, 1999, respondent issued a joint notice of
deficiency to petitioners determining a deficiency of $30,147 in
their Federal income tax for 1997 and an accuracy-related penalty
under section 6662(a) of $6,028.60. The deficiency was based on
respondent’s determination that petitioners failed to report
nonemployee compensation, interest income, and a distribution
from a retirement account as reported to respondent by third-
party payors on Forms 1099.
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