- 2 - Penalty Year Deficiency Sec. 6662 1993 $18,873 $3,775 1994 47,756 9,551 1995 51,584 10,317 The issues presented for our consideration are: (1) Whether a $116,000 settlement payment is excludable from gross income under section 104(a)(2);1 (2) whether $48,4202 in payments was nontaxable loans or taxable advances; and (3) whether petitioners are subject to section 6662(a) penalties for substantial understatement of tax or negligent disregard of the rules and regulations. To the extent that we hold amounts are includable in gross income, petitioners do not contest that such income is subject to self-employment tax. FINDINGS OF FACT3 Petitioners Edward P. Knoll and Mary King-Knoll resided in Barrington, Illinois, at the time their petition was filed. During 1965, following his graduation from Northwestern 1 All section references are to the Internal Revenue Code in effect for the years at issue, and all Rule references are to the Tax Court Rules of Practice and Procedure, unless otherwise indicated. 2 If the $116,000 and/or $48,420 amounts are includable in income, we must also decide the proper year for inclusion. 3 The parties’ stipulation of facts is incorporated by this reference.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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