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Respondent determined deficiencies in and an addition to
petitioners’ Federal income taxes as follows:
Year Deficiency Sec. 6651(a)(1)
1994 $10,909 --
1995 11,571 $2,322
1996 6,828 --
The issues for decision are: (1) Whether expenses listed on
Schedule C, Profit or Loss From Business, included with
petitioners’ Federal income tax return for each year in issue
were incurred in an activity for profit; (2) whether income
received and expenses incurred during 1994 by petitioners’
daughter are properly reportable on petitioners’ return for that
year; and (3) whether petitioners had reasonable cause for
failing to file a timely 1995 return.
Background
Some of the facts have been stipulated and are so found.
Petitioners are husband and wife. They filed a joint Federal
income tax return for each year in issue. At the time the
petition was filed, petitioners resided in Ardmore, Alabama.
References to petitioner are to Charlie Daniel Turner.
Petitioner has a doctorate in aerospace engineering. At
all relevant times he was employed on a full-time basis as an
aerospace engineer by Nichols Research Corporation (Nichols
Research). He was required to travel extensively in connection
with this employment. His traveling expenses, including
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