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Respondent determined a deficiency of $3,104 in petitioner’s
Federal income tax for 2000 and an addition to tax under section
6651(a)(1) of $109. After petitioner’s concession of unreported
income of $10,881, the issues for decision are whether
petitioner: (1) Is entitled to itemized deductions of $5,704,
(2) is entitled to deduct business expenses of $8,882, and (3) is
liable for the addition to tax for failure to file timely a
Federal income tax return.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received in evidence
are incorporated herein by reference. At the time the petition
was filed, petitioner resided in Vega Alta, Puerto Rico.
Petitioner filed on April 28, 2001, a Federal income tax
return for 2000. The return failed to report $10,881 of
nonemployee income earned by petitioner in 2000 from “J&S Floor
Covering” (J&S). After the statutory notice of deficiency in
this case was issued, petitioner submitted to respondent a Form
1040X, Amended U.S. Individual Income Tax Return, reporting the
$10,881 of nonemployee income omitted from his tax return. The
amended return also reported for the first time on Schedule A,
Itemized Deductions, itemized deductions of $5,704 and on
Schedule C, Profit or Loss From Business, business expense
deductions of $8,882.
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