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penalties). Consequently, the Court sustains respondent’s
imposition of an addition to tax pursuant to section 6651(a)(1).
C. 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 the 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 2004 Federal income tax
return and made no estimated tax payments for 2004 except for the
amount withheld from her wages.8 Petitioner had a tax liability
8 Again, because petitioner’s “zero return” is deemed
invalid, it is as though she filed no return for her 2004 taxable
year. In addition, the $3,573.81 in Federal income tax withheld
from petitioner’s wages is creditable under sec. 31 and is
treated as a payment of estimated tax pursuant to sec.
6654(g)(1). See Mendes v. Commissioner, 121 T.C. 308, 323 n.12
(2003). However, in light of her unreported income, petitioner
underpaid her estimated tax for 2004 and respondent has
(continued...)
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