John H. Webster - Page 2

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               Respondent determined a deficiency of $22,285 in                       
          petitioner’s 1998 Federal income tax, a section 6651(a)(1)                  
          addition to tax of $10,585.38, and a section 6654(a) addition to            
          tax of $1,011.45.  In his answer, respondent adjusted the amount            
          of the section 6651(a)(1) addition to tax to $5,571.25.2                    
               The issues for decision are:  (1) Whether petitioner is                
          liable for the deficiency determined by respondent; (2) whether             
          petitioner is liable for the failure to file addition to tax                
          under section 6651(a)(1); (3) whether petitioner is liable for              
          the failure to pay estimated tax addition to tax under section              
          6654(a); and (4) whether petitioner is liable for the penalty               
          pursuant to section 6673.                                                   
                                     Background                                       
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the attached exhibits are                      
          incorporated herein by this reference.  At the time he filed the            
          petition, petitioner resided in Santa Clara, California.                    


               2  Respondent attached a Form 4549, Income Tax Examination             
          Changes, to the notice of deficiency.  In the Form 4549,                    
          respondent asserted a sec. 6651(a)(1) addition to tax of                    
          $5,014.13 and a sec. 6651(a)(2) addition to tax of $5,571.25.               
          These additions to tax were consolidated on the first page of the           
          notice of deficiency where respondent asserted a sec. 6651(a)(1)            
          addition to tax in the amount of $10,585.38.  In his answer,                
          respondent concedes the sec. 6651(a)(2) addition to tax asserted            
          in Form 4549, and as a result, increased the sec. 6651(a)(1)                
          addition to tax initially asserted in Form 4549 to the maximum              
          amount of 25 percent of the amount required to be shown as tax on           
          the return.                                                                 





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