Gary Don Erwin - Page 8

                                          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