Royce A. Ellis - Page 3

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          years at issue in amounts greater than allowed by respondent; and           
          (6) whether petitioner is liable for additions to tax under                 
          section 6651(a)(1) for the years at issue and under sections                
          6651(a)(2) and 6654 for 2000.                                               
                                  FINDINGS OF FACT                                    
               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.  Petitioner resided in               
          Highlands Ranch, Colorado, when the amended petition was filed.             
               During the years at issue, petitioner operated a commercial            
          construction business as a sole proprietorship under the name               
          Coastal Builders.  Petitioner provided framing, drywall, plaster            
          finishing, and painting services.  Most of petitioner’s business            
          came from subcontract work for JPI Apartment Management and/or              
          JPI Apartment Construction, L.P. (JPI).                                     
               In 2001, JPI initiated an internal audit of petitioner and             
          discovered that the Social Security number he provided to JPI               
          actually belonged to his son.  On January 31, 2002, JPI filed               
          with the Internal Revenue Service (IRS) and mailed to petitioner            
          corrected Forms 1099-MISC, Miscellaneous Income, for 1999 and               
          2000, and an accurate Form 1099-MISC for 2001 using petitioner’s            
          Social Security number.  JPI reported it paid petitioner                    
          $3,130,417, $8,240,832, and $2,573,626, in the respective years             
          at issue.                                                                   

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