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D. Section 6654(a) Addition to Tax
Section 6654(a) imposes an addition to tax for underpayment
of estimated income tax by an individual taxpayer. That addition
to tax is computed by reference to four required installment
payments of the taxpayer’s estimated tax liability, each
constituting 25 percent of the “required annual payment.” Sec.
6654(d)(1)(A). For taxpayers whose adjusted gross income for the
preceding year was $150,000 or less, the “required annual
payment” is equal to the lesser of (1) 90 percent of the tax
shown on the individual's return for that year or, if no return
is filed, 90 percent of his or her tax for such year, or (2) if
the individual filed a return for the immediately preceding
taxable year, 100 percent of the tax shown on that return. Sec.
6654(d)(1)(A), (B)(i) and (ii).
Here, petitioner failed to file a 2002 Federal income tax
return and made no estimated tax payments for 2002. Petitioner
also failed to file a 2001 Federal income tax return. Because
petitioner did not file a return for the preceding taxable year,
2001, respondent has met his burden of producing evidence that
petitioner had a required annual payment of estimated tax for
2002.
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Last modified: November 10, 2007