-2-
Respondent determined deficiencies in petitioner’s income
tax and additions to tax and a penalty for taxable years 1986 to
1990 as follows:1
Additions to tax Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6653(b)(1) Sec. 6663
1986 $152,373 $114,280
1987 10,819 8,115
1988 58,380 -- 43,785 --
1989 55,509 $5,266 -- $41,632
1990 45,637 34,228
Section references are to the Internal Revenue Code as in
effect during the years in issue. Rule references are to the Tax
Court Rules of Practice and Procedure.
Background
A. The Pleadings
The petition in this case was filed on February 24, 1997.
Petitioner lived in Louisville, Kentucky, when the petition was
filed.
In the answer, respondent alleged:
(a) Throughout the years in issue, Petitioner and
W. Paul Schultz (Schultz), Petitioner’s accountant and
return preparer, willfully conspired to evade and
defeat income tax due from Petitioner for those years.
(b) Petitioner and Schultz willfully made and
signed federal income tax returns for Petitioner’s 1986
through 1990 tax years, which returns were made under
the penalties of perjury and were filed with the
Internal Revenue Service (the Service), which returns
they did not believe to be true and correct as to every
1 Respondent concedes the deficiencies, additions to tax,
and fraud penalty for 1986, 1987, and 1990, if respondent’s
motion is granted.
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