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Respondent determined a deficiency of $7,608 and an
accuracy-related penalty of $1,548 in petitioners’ 1998 Federal
income tax. After concessions by both parties, this Court must
decide: (1) Whether petitioner James A. Perry (petitioner) was
engaged in an activity as a tutor for profit; (2) whether
petitioner was engaged in an activity as an editor for profit;
and (3) whether petitioners are liable for the accuracy-related
penalty under section 6662(a).
Some of the facts in this case have been stipulated and are
so found. Petitioners resided in New Orleans, Louisiana, at the
time they filed their petition.
Petitioners timely filed their joint 1998 Federal income tax
return. Attached to the 1998 return were Forms W-2, Wage and Tax
Statement, issued to petitioner. One Form W-2 issued to
petitioner from Black Collegiate Services, Inc. (Collegiate
Services), reported “wages, tips, other compensation” of $30,532
and Federal income tax withheld of $1,575. Another Form W-2
issued to petitioner from Southern Baptist Convention William
Carey College (Carey College) reported “wages, tips, other
compensation” of $4,200 and Federal income tax withheld of $17
(all amounts are rounded). Both of the amounts reported as wages
on these Forms W-2 issued to petitioner were reported as gross
receipts on the Schedules C, Profit or Loss From Business,
discussed below.
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