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Respondent determined deficiencies and accuracy-related
penalties under section 6662(a) in petitioners’ 1999 and 2000
Federal income taxes in the following amounts:
Year Deficiency Sec. 6662(a) Penalty
1999 $6,783 $1,356.60
2000 10,565 2,113.00
The issues are (1) whether petitioners are entitled to deductions
on Schedule C, Profit or Loss From Business, for expenses of
$21,194 and $30,178 for the years in issue, and (2) whether
petitioners are liable for the accuracy-related penalties under
section 6662(a). Petitioners resided in Shelbyville, Tennessee,
at the time the petition was filed.
Background
The facts may be summarized as follows. On Schedule C
included in their 1999 and 2000 Federal income tax returns
petitioners claimed the following deductions:
1999 2000
Car & truck expenses $10,844 $16,268
Mortgage interest -0- 6,767
Depreciation 4,125 -0-
Supplies 750 375
Travel 2,750 1,265
Meals 325 238
Utilities 2,400 4,136
Business use of home -0- 1,129
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Last modified: May 25, 2011