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Respondent determined a deficiency of $3,075 in petitioners’
1998 Federal income tax and an addition to tax under section
6651(a)(1) of $769.25. After respondent’s concession that
petitioners are entitled to an education credit of $383, the
issues are whether petitioners are (1) entitled to deduct certain
Schedule C, Profit or Loss From Business, business expenses under
section 162 relating to a part-time law practice of petitioner
Charles A. Brown, Jr. (Mr. Brown); (2) entitled to deduct a
greater amount of charitable contributions under section 170 than
allowed by respondent; and (3) liable for the addition to tax
under section 6651(a)(1) for failing to timely file their 1998
return.
At the time the petition was filed petitioners resided in
Westfield, New Jersey.
Background
Mr. Brown has been an attorney for 30 years. In 1998, he
worked full-time for a company called Mecca and part-time with
his own law practice. Petitioner Linda L. Brown (Mrs. Brown)
operated a child day care services business. Each filed a
Schedule C for the respective business, but only items concerning
Mr. Brown’s Schedule C are in dispute.
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