PURSUANT TO INTERNAL REVENUE CODE
SECTION 7463(b),THIS OPINION MAY NOT
BE TREATED AS PRECEDENT FOR ANY
1Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code in effect for the years at
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
T.C. Summary Opinion 2006-49
UNITED STATES TAX COURT
MICHAEL AND PENNY RHODES, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 17280-03S. Filed April 11, 2006.
Douglas E. Johnston, for petitioners.
Timothy A. Lohrstorfer, for respondent.
COUVILLION, Special Trial Judge: This case was heard
pursuant to section 7463 in effect when the petition was filed.1
- 2 -
The decision to be entered is not reviewable by any other court,
and this opinion should not be cited as authority.
Respondent determined the following deficiencies in Federal
income taxes and the penalties for fraud under section 6663(a):
The issues for decision are: (1) Whether petitioners are
entitled to deduct on Schedules C, Profit or Loss From Business,
losses in the amounts of $19,738.50 and $17,125.39, respectively,
for 1994 and 1995, and (2) whether petitioner wife Penny Rhodes
(Ms. Rhodes) is liable for section 6663(a) penalties for fraud
with respect to the joint 1994 and 1995 Federal income tax
returns of her and her spouse.
Some of the facts were stipulated. Those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. Petitioners’ legal residence at the time the petition
was filed was Garrett, Indiana.
During the years at issue, petitioners lived and worked in
Garrett, Indiana. Petitioner husband (Mr. Rhodes) was a railroad
brakeman and conductor for CSX Transportation, Inc., during the
years at issue. Beginning in 1993 and during the years at