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determination regarding the application of the self-employment
tax to petitioner’s net earnings and the amounts he determined.
II. Additions to Tax for Fraud
Respondent determined additions to tax under section 6653(b)
for petitioner’s 1985, 1986, 1987, and 1988 tax years. Section
6653(b), in effect for the tax years at issue, provided for
additions to tax for underpayments of tax which are attributable
to fraud. Section 6653(b)(1) and (2), in effect for petitioner’s
1985 tax year provided:
SEC. 6653(b). Fraud.--
(1) In general.--If any part of any underpayment
* * * of tax required to be shown on a return is due to
fraud, there shall be added to the tax an amount equal
to 50 percent of the underpayment.
(2) Additional amount for portion attributable to
fraud.--There shall be added to the tax (in addition to
the amount determined under paragraph (1)) an amount
equal to 50 percent of the interest payable under
section 6601--
(A) with respect to the portion of the
underpayment described in paragraph (1) which is
attributable to fraud, and
(B) for the period beginning on the last day
prescribed by law for payment of such underpayment
(determined without regard to any extension) and
ending on the date of the assessment of the tax
(or, if earlier, the date of the payment of the
tax).
Section 6653(b)(1) and (2), in effect for 1986 and 1987,
provided:
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