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6662(a).1 After concessions, we decide the following issues:
1. Whether the burden of proof has been shifted to
respondent by virtue of section 7491(a). We hold that the burden
of proof remains with petitioners.
2. Whether petitioners underreported their Schedule C,
Profit or Loss From Business, gross receipts by $137,221. We
hold that they did.
3. Whether petitioners are liable for the accuracy-related
penalty under section 6662(a). We hold that they are.
FINDINGS OF FACT
Some facts were stipulated. The stipulated facts and the
accompanying exhibits are incorporated herein by this reference.
We find the stipulated facts accordingly. Petitioners are
married individuals who filed a joint 1998 Federal income tax
return. When the petition was filed, petitioners resided in
Palmdale, California.
During 1998, petitioner2 owned and operated as a sole
proprietorship a billiard hall named Playa Azul. Petitioners
also owned certain residential rental real estate. On their 1998
tax return, petitioners reported total income of $95,373. Of
1 Section references are to the applicable version of the
Internal Revenue Code. Rule references are to the Tax Court
Rules of Practice and Procedure.
2 When used in a singular form, the term “petitioner” refers
to Rafael M. Gutierrez.
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