Alex and Tonja Oria - Page 8

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               less than the 40 percent or so that I was supposed to                  
               be paying.                                                             
          The $32,580 Omission                                                        
               During 2000, Mr. Oria failed to report $32,580 of personal             
          expenses charged on Medico’s American Express card and paid by              
          The $27,550 Omission                                                        
               During 2000, Mr. Oria deposited receipts of Medico’s                   
          totaling $194,888.57 into his personal bank account.  Those                 
          deposits were not entered in the general ledger and were not                
          reported on Medico’s 2000 Federal income tax return.  Mr. Oria              
          paid certain expenses of Medico’s from his personal bank account;           
          the excess of deposits made over expenses paid during 2000 is               
          $27,550.  Petitioners did not provide personal bank account                 
          records to Mr. Loeser.                                                      
          The $5,150 Omission                                                         
               During 2000, Mr. Oria failed to report $5,150 of golf club             
          dues and other personal expenses paid by Medico.                            
               Section 6662 imposes an accuracy-related penalty in the                
          amount of 20 percent of the portion of any underpayment                     
          attributable to, among other things, negligence.2  Sec. 6662(a),            
          and (b)(1).  Negligence has been defined as the failure to                  
          exercise the due care of a reasonable and ordinarily prudent                
          person under like circumstances.  Nis Family Trust v.                       

               2  Respondent concedes any basis for a sec. 6662 penalty               
          other than negligence.                                                      

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Last modified: November 10, 2007