1998 Tax Ct. Memo LEXIS 54">*54 Decision will be entered for respondent.
MEMORANDUM OPINION
FOLEY, JUDGE: Respondent determined the following deficiencies, 1998 Tax Ct. Memo LEXIS 54">*55 additions to tax, and accuracy-related penalties relating to petitioner's Federal income taxes:
Addition to tax | Penalty | ||
Year | Deficiency | Sec. 6651(a)(1) | Sec. 6662(a) |
1992 | $ 8,866 | $ 2,217 | $ 1,773 |
1993 | 17,755 | 4,439 | 3,551 |
All section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. After concessions by petitioner, the issues for decision are as follows:
1. Whether petitioner is entitled to a deduction for business expenses. We hold that she is not.
2. Whether petitioner is liable for additions to tax for failing to file her tax returns in a timely manner. We hold that she is.
3. Whether petitioner is liable for accuracy-related penalties for negligence. We hold that she is.
BACKGROUND
The facts have been fully stipulated under Rule 122 and are so found. Petitioner resided in Bensalem, Pennsylvania, at the time she filed her petition.
Petitioner's husband, Glenn W. Phillips, was the sole shareholder of N.H.R. Corp. (NHR). Petitioner, who had no affiliation with NHR, owned a disability insurance policy which in 1992 and 1993 paid her $60,000 and $1998 Tax Ct. Memo LEXIS 54">*56 90,000, respectively, allegedly to cover the cost of NHR's overhead expenses.
On October 14, 1994, petitioner filed Federal income tax returns for 1992 and 1993. On the returns, petitioner selected married filing separate status and did not report the benefits received under the policy. On May 18, 1995, petitioner filed amended Federal income tax returns on which she reported income of $60,000 and $90,000, respectively, for 1992 and 1993. On her 1993 amended return, petitioner deducted $150,000 in business expenses. This resulted in a $60,000 net operating loss which petitioner then carried back and applied against her 1992 gross income. On July 31, 1996, respondent issued a notice of deficiency to petitioner. Respondent determined that petitioner was not entitled to deduct the claimed business expenses and was liable for deficiencies in her Federal income tax, additions to tax, and accuracy-related penalties.
DISCUSSION
Petitioner contends that she should be allowed to offset the income she received from the insurance proceeds by deducting NHR's business expenses. Respondent contends that petitioner has failed to establish that she is entitled to such a deduction. 1998 Tax Ct. Memo LEXIS 54">*57 We agree with respondent.
Petitioner did not present any evidence to establish that she paid NHR's expenses. Moreover, even if she had presented such evidence, petitioner has failed to cite, and we have not found, any authority that would permit her to deduct NHR's expenses on her personal return. See Rule 142(a);
Respondent determined that petitioner was liable for additions to tax for failure to file her Federal income tax returns in a timely manner as well as accuracy-related penalties for negligence.
All other arguments raised by the parties are either irrelevant or without merit.
To reflect the foregoing,
Decision will be entered for respondent.