-2-
penalty under section 6662(a).1 For 1995, respondent determined
a $25,759 deficiency and a $5,152 accuracy-related penalty. For
1996, respondent determined a $24,587 deficiency and a $4,917
accuracy-related penalty.
After concessions,2 there are three issues for decision.
The first issue is whether petitioners substantiated various
business expenses they claimed in each of the years at issue. We
hold that petitioners did not substantiate any of these expenses.
The second issue is whether petitioners failed to report $3,424
of rental income in 1996. We hold that they did. The third
issue is whether petitioners are liable for the accuracy-related
penalty for each of the years at issue. We hold that they are.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and accompanying exhibits, the
supplemental stipulation of facts, and the second supplemental
stipulation of facts are incorporated by this reference.
1All section references are to the Internal Revenue Code in
effect for the years at issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated. Amounts have been rounded to the nearest dollar.
2Petitioners conceded the increases in rental income
respondent determined for 1994 and 1995 and certain business
expenses respondent disallowed for each of the years at issue.
Respondent conceded certain disallowed business expenses that
petitioners claimed for each of the years at issue.
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