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Dr. Trowbridge’s tax (less allowable wage withholding credits)
for each year far exceeds $500.
Our disposition of the default motion also precludes the
applicability of the section 6654(e)(2) exception (zero tax for
preceding year) with respect to Dr. Trowbridge’s 1997 taxable
year. In that regard, although the record does not reveal Dr.
Trowbridge’s tax for 1995, we deem his 1995 Form 1040 (showing
tax of $133,977 and no tax credits) to be evidence that such tax
was greater than zero, which would render the section 6654(e)(2)
exception inapplicable to his 1996 taxable year as well.
Based on the foregoing, and in the absence of any evidence
to the contrary, we conclude that Dr. Trowbridge was subject to
estimated tax with respect to each of his 1996 and 1997 taxable
years and that he made no timely payments in respect of such
liability. Thus, the amount of Dr. Trowbridge’s underpayment
with respect to each installment of his required annual payments
for those years is equal to the full amount of such installment.23
VI. Section 6673 Penalty
In pertinent part, section 6673(a)(1) provides:
SEC. 6673. SANCTIONS AND COSTS AWARDED BY COURTS.
(a) Tax Court Proceedings.--
23 In that regard, we accept respondent’s computation of
the 1997 addition to tax ($11,316), and we direct the parties to
determine the amount of the 1996 addition to tax on the basis of
Dr. Trowbridge’s 1996 tax (more precisely, 90 percent thereof),
determined in accordance with note 20, supra.
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