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Unreported Income
Respondent’s determination of additional Schedule C income
of $1,597 is based on third-party information submitted on Forms
1099-MISC. Petitioner does not dispute that her former husband
may have received the income reported. We sustain respondent’s
determination with respect to this issue.
Penalty Under Section 6662(a)
Relevant here, section 6662(a) imposes a penalty in the
amount of 20 percent of the underpayment due, inter alia, to
negligence or to a substantial understatement of tax. Neither in
the notice of deficiency nor at trial did respondent specify
which ground applied here. We do not find that the negligence
penalty is appropriate here with regard to this petitioner, and
therefore, we focus on whether there was a substantial
understatement. A substantial understatement is defined, inter
alia, as an understatement of tax that exceeds 10 percent of the
tax required to be shown on the return. Sec. 6662(d)(1)(A)(i).
The understatement here exceeds 10 percent of the tax required to
be shown on the return. See sec. 6662(d)(2). Petitioner has not
shown that any of the circumstances contained in section
6662(d)(2)(B) apply.
Innocent Spouse Relief
A requesting spouse may elect relief from joint and several
liability under section 6015. There are three types of relief
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Last modified: May 25, 2011