Eddie Lee Williams - Page 11

                                       - 11 -                                         
          of the tax shown on the individual’s return for that year (or, if           
          no return is filed, 90 percent of the individual’s 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)(A) and (B).  There are two                 
          mechanical exceptions to the applicability of the section 6654(a)           
          addition to tax.  First, as relevant to this case, 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) is less than $500.  Sec. 6654(e)(1).  Second,            
          the addition is not applicable if the individual’s tax liability            
          for the preceding taxable year was zero.  Sec. 6654(e)(2).                  
               Respondent’s determination that petitioner underpaid his               
          estimated taxes is based on petitioner’s tax liability as                   
          determined in the statutory notice of deficiency.  This                     
          determination is correct with respect to taxable year 1990                  
          because petitioner did not file a return for taxable year 1989 or           
          1990.  Sec. 6654(d)(1)(B).  However, this determination is                  
          incorrect with respect to taxable year 1989.  Petitioner and his            
          wife filed a joint Federal income tax return for taxable year               
          1988 which reflected gross income of $2,068 and a tax liability             
          of zero.  Thus, because 100 percent of petitioner’s 1988 tax                
          liability as shown on his filed return was zero, petitioner was             
          not required to make estimated tax payments for 1989.  Sec.                 
          6654(d)(1)(B)(ii).                                                          






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011