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Respondent determined deficiencies of $3,175.85 and $3,554,
respectively, in petitioner’s Federal income taxes for the years
2002 and 2003, an addition to tax under section 6651(a)(1) for
the year 2002 in the amount of $511.71, an additional tax under
section 72(t) in the amount of $107.85 for the year 2002, a
liability of $2,505 for self-employment tax under section 1401(a)
for the year 2003, and a negligence penalty under section 6662(a)
for both years.
In a trial memorandum, respondent notes that, prior to
trial, respondent conceded a capital gain loss of $9,405 for the
year 2002 that had been disallowed in the notice of deficiency,
and, therefore, petitioner is entitled to a capital loss
deduction of $3,000 for 2002 and a carryover capital loss
deduction of $3,000 to 2003. As a result of this concession, the
deficiencies, the addition to tax, and the penalties were reduced
to the following amounts:
Addition to Tax Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6662
2002 $1,316 $100 $263
2003 3,138 -- 628
Subsequent to these concessions, respondent filed an answer
alleging that petitioner is liable for the fraud penalty under
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