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Respondent determined a deficiency in petitioners’ Federal
income tax for 1999 in the amount of $8,180, as well as an
accuracy-related penalty under section 6662(a) in the amount of
$1,636.2
The issues for decision are:
(1) Whether petitioners failed to report self-employment
income in the amount of $19,125. We hold that they did.
(2) Whether petitioners are liable for the accuracy-related
penalty under section 6662(a). We hold that they are.
Adjustments relating to petitioners’ earned income credit
and self-employment tax are purely mechanical matters, the
resolution of which is dependent on our disposition of the first
disputed issue.
Background
Some of the facts have been stipulated, and they are so
found. Petitioners resided in New Smyrna Beach, Florida, at the
time that their petition was filed with the Court.
Petitioners are a married couple. Petitioners have two sons
who were schoolage and living at home throughout the taxable year
in issue.
Prior to 1999, petitioner David M. Fugitt (Mr. Fugitt) had
primarily worked selling used automobiles. During 1999, Mr.
Fugitt worked as a recreational vehicle salesman for Southeast RV
2 All amounts have been rounded.
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