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report the income listed on the 1988 information returns mailed
to him.
We sustain respondent’s determination under section
6653(a)(1).
C. Respondent’s Section 6654 Determination
1. Introduction
Section 6654 provides for an addition to tax in the event of
an underpayment of a required installment of individual estimated
tax. Sec. 6654(a) and (b). As relevant to this case, each
required installment of estimated tax is equal to 25 percent of
the “required annual payment”, which in turn is equal to the
lesser of (1) 90 percent of the tax shown on the individual’s
return for that year (or, if no return is filed, 90 percent of
his or her tax for such year), or (2) if the individual filed a
return for the immediately preceding taxable year, 100 percent of
the tax shown on that return. Sec. 6654(d)(1)(A), (B)(i) and
(ii). The due dates of the required installments for a calendar
taxable year are April 15, June 15, and September 15 of that year
and January 15 of the following year. Sec. 6654(c)(2). For
purposes of section 6654, an individual’s tax consists of income
tax and self-employment tax and is determined before the
application of any wage withholding credit12 (but after the
12 Under sec. 6654(g)(1), wage withholding credits are
treated as payments of estimated tax.
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