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Respondent determined the following Federal income tax
deficiencies, additions to tax, and penalties for petitioner
Erica Y. Wright’s (Mrs. Wright) 1999, 2000, and 2001 taxable
years:
Addition to Tax Penalty
Year Deficiency Sec. 6651(a)(1) Sec. 6662
1999 $34,194.00 $8,528.25 $6,838.80
2000 4,183.00 416.00 836.60
2001 10,495.00 -- 2,099.00
After concessions by respondent,3 the issues for decision are:
(1) Whether petitioners failed to report distributions in
excess of their basis from an S corporation, M. Wright &
Associates, Inc. a.k.a Wright & Associates, Inc. (Wright &
Associates), for their 1999, 2000, and 2001 taxable years in the
amounts of $8,774, $21,283, and $44,151, respectively;
(2) whether petitioners understated their income from Wright
& Associates by $50,000 for taxable year 1999;
(3) whether petitioners failed to include in income for
their 1999 taxable year $54,000 that they deposited into an
offshore account;
3Respondent has conceded that health insurance premiums that
Wright & Associates paid on behalf of petitioners for 1999, 2000,
and 2001, in the amounts of $5,287, $6,625, and $9,208,
respectively, and for which petitioners claimed a 60-percent
deduction, should not be included in petitioners’ taxable income.
Respondent has also conceded that Mrs. Wright is not liable for
the sec. 6662 accuracy-related penalty on any portion of the
underpayment to which a sec. 6663 civil fraud penalty applies.
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