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failure to file a timely income tax return and alternatively
under section 6651(a)(1) for failure to file timely. Respondent
also determined that petitioners were liable for the years at
issue for the penalty under section 6654 for failure to pay
estimated taxes. After concessions, the issues to be decided
include whether petitioners are liable for the addition to tax
under section 6651(f) for fraudulent failure to file a timely
income tax return. We hold that petitioners are liable. We
therefore do not need to decide alternatively whether petitioners
are liable for the addition to tax under section 6651(a)(1).
The second question we are asked to decide is whether
petitioner Dennis E. Runkle (Mr. Runkle) is entitled to deduct
business expenses in excess of the 19.2-percent deduction ratio
of expenses to income that respondent allowed in the notice of
deficiency (deficiency notice), dated August 7, 2002, based upon
the expenses Mr. Runkle claimed regarding his insurance-related
business on the 3 previous years’ tax returns. We hold that he
is not.
The third issue is whether petitioners are liable for the
years at issue for the addition under section 6654 for failure to
pay estimated taxes. We hold that petitioners are liable.
1(...continued)
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
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Last modified: May 25, 2011