Janet A. Phillips - Page 10

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          for her 2003 taxable year.  Because petitioner had a tax                    
          liability for the preceding taxable year, see supra note 5,                 
          respondent has met his burden of producing evidence that                    
          petitioner had a required annual payment of estimated tax for               
               The Court also concludes that petitioner does not fit                  
          within any of the exceptions listed in section 6654(e).10  As a             
          consequence, the Court sustains respondent’s determination of the           
          addition to tax pursuant to section 6654(a).                                
          IV. Section 6673 Penalty                                                    
               Section 6673 allows this Court to award a penalty to the               
          United States in an amount not in excess of $25,000 for                     

          calculated the addition to tax under sec. 6654(a) after                     
          accounting for the $3,573.81 in Federal income tax withholding.             
               9 Because the tax shown on petitioner’s 2003 Federal income            
          tax return was more than $3,573.81, she has not made the required           
          annual payment of estimated tax.  See sec. 6654(d)(1)(B)(ii),               
               10 Sec. 6654(e) provides two exceptions to the sec. 6654(a)            
          addition to tax.  First, the addition is not applicable if the              
          tax shown on the taxpayer’s return for the year in question (or,            
          if no return is filed, the taxpayer’s tax for that year), reduced           
          for these purposes by any allowable credit for wage withholding,            
          is less than $1,000.  Sec. 6654(e)(1).  Second, the addition is             
          not applicable if the taxpayer’s tax for the full 12-month                  
          preceding taxable year was zero and the taxpayer was a citizen or           
          resident of the United States.  Sec. 6654(e)(2).  In light of our           
          earlier conclusion regarding petitioner’s unreported income,                
          petitioner is liable for a deficiency for 2004 that, net of                 
          withholding, exceeds $1,000.  And, it has been shown that                   
          petitioner had a tax liability in 2003.                                     

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