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Respondent determined deficiencies in petitioners’ Federal
income taxes and accuracy-related penalties as follows:
Penalty
Year Deficiency Sec. 6662(a)
1996 $10,950 $2,190.00
1997 10,007 2,001.40
1998 11,643 2,328.60
After a concession by respondent,2 the issues are (1)
whether petitioners3 are liable for taxes on unreported income in
the amounts of $32,810, $33,071, and $36,392 for the taxable
years 1996, 1997, and 1998, respectively, and (2) whether
petitioners are liable for accuracy-related penalties under
section 6662(a) for the years in issue. Petitioners resided in
Tampa, Florida, at the time the petition was filed.
Background
During the examination of petitioners’ 1996, 1997, and 1998
Federal income tax returns, petitioner provided to respondent
unorganized boxes of receipts for his business and personal
expenses. Respondent calculated petitioner’s business expenses
using petitioners’ 1996, 1997, and 1998 returns. Respondent
2 Respondent conceded that petitioners are entitled to a
dependency exemption for their daughter, Robyn M. Valdes, in the
1997 taxable year.
3 Petitioner Rosemary S. Valdes did not appear at the
trial and did not sign the stipulation of facts. With respect to
her, we dismiss this case for failure to prosecute. Rule 123(b).
The decision, when entered, will be in the same amount as
ultimately determined against petitioner Rene D. Valdes. In the
opinion, references to petitioner are to Rene D. Valdes.
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