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Respondent determined a deficiency in petitioners’ Federal
income tax of $12,120 and an accuracy-related penalty in the
amount of $2,424 pursuant to section 6662(a) for the taxable year
2000.
After a concession by petitioners,1 the issues for decision
are: (1) Whether petitioners failed to report income, received
by petitioner Donald J. Everhart, from Ronald Muhammad for
contracting work; and (2) whether petitioners are liable for an
accuracy-related penalty in the amount of $2,424 pursuant to
section 6662(a) for the taxable year 2000.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioners resided in
Chicago, Illinois, on the date the petition was filed in this
case.
Petitioners timely filed a Federal joint income tax return
for the taxable year 2000. During taxable year 2000, Donald J.
Everhart (petitioner) was a contractor licensed by the city of
Chicago. Petitioner was retained in that capacity by Ronald
Muhammad (Mr. Muhammad) to perform construction services at
rental property owned by Mr. Muhammad.
1Petitioners conceded that they failed to include in gross
income for taxable year 2000, $28 of interest income.
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