Stewart L. and Patricia A. Welch - Page 2




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          accuracy-related penalties under section 6662(a), and fraud                 
          penalties under and 6663(a):1                                               
               Years         Deficiencies      Sec. 6662(a)  Sec. 6663(a)             
               1993            $11,886             $251         $7,972                
               1994             13,286             441          8,309                 
               1995             15,576              94         11,255                 
               Following respondent’s concession in answer that petitioners           
          are not liable for the fraud penalties under section 6663(a), and           
          respondent’s allegation in answer that petitioners are liable for           
          the accuracy-related penalties under section 6662(a) as to the              
          entire deficiencies, we decide primarily whether petitioners                
          underreported their sole-proprietorship gross receipts by                   
          $33,599, $37,317, and $51,955.2  We hold they did.  We decide               
          secondly whether petitioners are liable for the accuracy-related            
          penalties under section 6662(a).  We hold they are liable only              
          for the amounts determined under section 6662(a) in the notice of           
          deficiency.                                                                 
                                  FINDINGS OF FACT                                    
               Some facts have been stipulated and are so found.  The                 
          stipulated facts and exhibits submitted therewith are                       



               1 Unless otherwise indicated, section references are to the            
          Internal Revenue Code in effect for the subject years, Rule                 
          references are to the Tax Court Rules of Practice and Procedure,            
          and dollar amounts are rounded.                                             
               2 Respondent’s allegation in answer as to the increased                
          liability under sec. 6662(a) relates solely to the unreported               
          gross receipts.                                                             




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