John Parks Trowbridge - Page 19

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                    2.  Section 6654                                                  
               Section 6654 provides for an addition to tax in the event of           
          an underpayment of a required installment of individual estimated           
          tax.  As relevant to these cases, 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)(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 credit7 (but after the application of other allowable           
          credits).  Sec. 6654(f); see sec. 31.                                       
               There are two mechanical exceptions to the applicability of            
          the section 6654 addition to tax.  First, as relevant to these              
          cases, the addition is not applicable if the tax shown on the               
          individual’s return for the year in question (or, if no return is           
          filed, the individual’s tax for that year), reduced for these               

               7  Under sec. 6654(g)(1), wage withholding credits are                 
          treated as payments of estimated tax.                                       

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