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resided in Security, Colorado, at the time the petition was
filed.
Petitioner, a disc jockey, failed to file timely Federal
income tax returns for taxable years 1998, 1999, and 2000.
A. Petitioner's Individual Income Tax Return for 1998
Attached to petitioner's Form 1040, U.S. Individual Income
Tax Return, for 1998 was a Schedule C on which petitioner
reported gross receipts of $21,600 and contract labor costs of
$19,400. Petitioner also deducted car and truck expenses of
$2,129; depreciation of $1,316; office expenses of $396; supplies
expense of $238; and utilities of $780.
During 1998, in response to his claim, petitioner received a
reward from the IRS in the amount of $7,138.20. Respondent
increased petitioner's gross income by this unreported amount.
Respondent disallowed $1,008 of the deduction for car and truck
expenses and all the deductions for contract labor expenses of
$19,400 due to lack of substantiation. Respondent also
determined that petitioner is liable for an addition to tax under
section 6651(a)(1) for failure to timely file his 1998 return.
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