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and $3,099.60 for the years 2000, 2001, and 2002, respectively.1
The issues presently before the Court for decision are:
1. Whether petitioner Dorothy M. Smith’s direct marketing
activities were conducted with an actual and honest intent to
profit. We hold that they were not;
2. whether petitioners are liable for penalties pursuant to
section 6662(a) and (b)(1). We hold they are not.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulation
of facts and the accompanying exhibits are incorporated by this
reference. Dr. William C. Smith and his wife Dorothy M. Smith
resided in Rossville, Georgia, at the time their joint petition
was filed with this Court.
Dr. Smith is a medical doctor and was engaged in the
practice of medicine during the years at issue. Mrs. Smith
graduated from college with training as an accountant. Later
Mrs. Smith became a registered nurse and worked as a nurse from
1981 to 1995. During this period, Mrs. Smith also worked as an
administrator with a home health agency. At the end of this
period, Mrs. Smith was earning approximately $75,000 a year.
1Unless otherwise indicated, all section references are to
the Internal Revenue Code, as in effect for the years in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
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