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miscellaneous business expenses on Schedule A, Itemized
Deductions, in all 3 years, and a deduction for a payment to a
self-employed plan (SEP) in the year 2000. As explained herein,
we shall sustain most of respondent’s adjustments and the
accuracy-related penalties.
Background
At the time of filing the petition in this case, petitioner
was a resident of Norwich, Connecticut.
Petitioner was married during the years in question, but she
and her husband filed separate income tax returns. Petitioner’s
married filing separate income tax returns were prepared by her
husband. Petitioner’s Federal income tax returns were audited
for 2000 through 2002, and petitioner failed to provide adequate
substantiation for certain claimed expenses.
On March 9, 2005, respondent issued a notice of deficiency
to petitioner. Respondent determined the following deficiencies
and penalties:
Accuracy-Related
Year Deficiency Sec. 6662 Penalty
2000 $10,624 $2,124.80
2001 9,718 1,943.60
2002 304 60.80
For the taxable year 2000, petitioner reported and
respondent disallowed the following items:
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