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under section 6651(a)(1) and (2),1 and estimated tax additions to
tax under section 6654 for 1991-97 as follows:
Additions to Tax
Sec. Sec. Sec.
Year Deficiency 6651(a)(1) 6651(a)(2) 6654
1991 $28,490 $7,123 no $1,628
1992 31,638 7,910 no 1,380
1993 38,905 9,726 no 1,630
1994 55,193 13,798 no 2,864
1994 53,544 13,386 no 2,903
1996 58,938 13,261 yes1 3,137
1997 63,330 14,249 yes1 3,388
1Sec. 6651(a)(2) provides for an addition to tax
of 0.5 percent per month until payment, not to exceed
25 percent.
Respondent concedes that petitioner is not liable for the
addition to tax under section 6651(a)(2) for 1996-97. The issues
remaining to be decided are:
1. Whether the notice of deficiency is invalid because
respondent did not prepare a substitute for return for each of
the years at issue; and
2. if the notice of deficiency is valid, then
(a) whether respondent properly reconstructed
petitioner’s business income using the bank deposits method; and
(b) whether petitioner is liable for the additions to
tax under sections 6651(a)(1) and 6654.
1Section references are to the Internal Revenue Code in
effect for the years at issue, and Rule references are to the Tax
Court Rules of Practice and Procedure. Amounts are rounded to
the nearest dollar.
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