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Unless otherwise indicated, section references are to the
Internal Revenue Code in effect for the years in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
In an amendment to answer with respect to petitioner’s 1996
taxable year, respondent asserted an increased tax deficiency of
$13,531 and accuracy-related penalty of $2,706.20. This results
in a total deficiency of $14,699.70 and an accuracy-related
penalty of $2,939.94 for petitioner’s 1996 taxable year.
After deemed concessions by petitioner, the issues the Court
must decide are: (1) Whether petitioner had unreported gross
income in 1996; and (2) whether petitioner is liable for the
accuracy-related penalty under section 6662(a) with respect to
the 1996 taxable year.
Some of the facts have been stipulated and are so found.
Petitioner resided in Elverta, California, at the time he filed
his petitions.
We first review petitioner’s 1995 taxable year. Petitioner
filed a Form 1040, U.S. Individual Income Tax Return, for the
1995 taxable year. On his 1995 return, petitioner reported
“wages, salaries, tips, etc.” of zero. Petitioner also reported
adjusted gross income and total tax of zero. In a two-page
document attached to his 1995 return, petitioner stated in part:
It should also be noted that I had “zero” income
according to the Supreme Court’s definition of income
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