7
On this point, petitioner’s reasoning is without merit.
Compliance treated petitioner as an independent contractor
throughout 2001. It withheld no Federal income tax from
petitioner’s wages. Accordingly, respondent’s determination
matters little against the fact that petitioner’s 2001 wages and
interest income were subject to tax. Since Compliance withheld
no Federal income tax from petitioner’s wages during the year, it
was petitioner’s obligation to pay the tax when due.
Section 6654(a) Addition to Tax
Section 6654(a) imposes an addition to tax for failure to
pay estimated income tax where prepayments of such tax, either
through withholding or by making estimated quarterly tax payments
during the course of the year, do not equal the percentage of
total liability required under the statute, unless the taxpayer
shows that one of the statutory exceptions applies. Sec.
6654(a); Niedringhaus v. Commissioner, 99 T.C. 202, 222 (1992).
The amount required to be paid through each such estimated
quarterly payment is 25 percent of the “required annual payment”.
Sec. 6654(d)(1)(A). The “required annual payment” is, in turn,
the lesser of 90 percent of the tax shown on the return for that
taxable year or 100 percent of the tax shown on the return of the
individual for the preceding taxable year. Sec. 6654(d)(1)(B).
Unlike section 6651(a), there is no broadly applicable
reasonable cause exception to the section 6654 addition to tax;
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011