Michael W. Allen - Page 2

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          determined petitioner was liable for a $1,900.60 accuracy-related           
          penalty under section 6662.  For 2001, respondent determined a              
          deficiency of $20,812.00 and determined petitioner was liable for           
          a $4,162.40 accuracy-related penalty under section 6662.                    
               There are four issues for decision.  The first issue is                
          whether compensation petitioner received from an American Indian            
          tribe during the years at issue is taxable to him.  We hold that            
          it is.  The second issue is whether petitioner may reduce his               
          income by $69,916 for 2001.  We hold that he may not.  The third            
          issue is whether petitioner is entitled to deductions beyond                
          those reported on his returns for the years at issue.  We hold              
          that he is not.  The fourth issue is whether petitioner is liable           
          for the accuracy-related penalty under section 6662 for the years           
          at issue.  We hold that he is.                                              
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the accompanying exhibits are                  
          incorporated by this reference.  Petitioner resided in Lac Du               
          Flambeau, Wisconsin, at the time he filed the petition.                     
          Petitioner’s Income During the Years at Issue                               
               Petitioner is an enrolled member of the Lac Du Flambeau                
          Band, a federally recognized American Indian tribe (the tribe).             
          The leadership of the tribe consists of an elected tribal                   
          council.  Petitioner served as vice chairman of the tribal                  

               1(...continued)                                                        
          Tax Court Rules of Practice and Procedure, unless otherwise                 
          indicated.                                                                  




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