Khuong Duong v. Commissioner; Dung T. Tran v. Commissioner. U.S. Tax Court, Dkt. No. 14991-13, 15151-13, TC Memo. The IRS founded that two nail salon owners underreported their income utilizing the bank deposits method. The unreported income was allocated similarly between the taxpayers for the deposits into their joint accounts and wholly to one of the business owners for the deposits into his wholly-owned account.
However, the IRS’s perseverance of additional suggestion income for both individuals was arbitrary and erroneous. A business owner was liable for an accuracy-related penalty related to carelessness. She underreported income and didn’t maintain adequate records for the nail salon businesses. Furthermore, she didn’t testify and offered no reliable evidence that she attempted to assess her tax liability properly.-CCH. A business owner was responsible for scams penalties for both tax years at issue. The “badges of fraud” demonstrated that the individual evaded payment of tax he knew to be owed.
The business owner made false statements and didn’t cooperate with the IRS; he acted with fraudulent purpose and his underpayments for the taxes years at issue were related to scams.-CCH. Hung Duong, and Dung T. Tran, prose; Shari A. Sale, for respondent. Federal income tax and civil fraud penalties under section 6663(a) 1 and against petitioner Tran certain enhancements to tax.
The deficiencies stem mainly from petitioners’ underreporting of income from two nail salons they jointly managed, AK Nails and Perfection Nails. After conducting a bank deposits evaluation, the IRS made whipsaw determinations by asserting, in full against each petitioner, all taxable deposits to their joint standard bank accounts. Some of the known facts have been stipulated and are so found. The stipulations of facts and the attached exhibits are incorporated by this reference. When they petitioned this Court, petitioner Khuong Duong (Duong) lived in Severn, Maryland, and petitioner Dung T. Tran (Tran) resided in Plant City, Florida.
- 4 (2) MAXIMUM ESTATE TAX RATE
- BUSN 6070 Management Accounting (3 hours)
- Career support staff per college student (3%)
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Petitioners jointly possessed and managed AK Nails and Perfection Nails during the years in issue and split the gains and deficits 50-50. Each salon experienced several nail channels so that multiple stylists could serve customers simultaneously. Tran was the primary stylist, and often worked alone; petitioners employed other nail stylists in both salons as necessary to meet customer demand. Petitioners paid these stylists a wage by check, and the stylists held any tips that customers offered them.
Customers covered the salon services and tips by credit card, debit-credit card, or cash. Duong functioned as a store supervisor and didn’t become a nail stylist. Although petitioners were not wedded during 2007, they filed a joint Federal income tax comes back for this 12 months. 37,469 from AK Nails. For 2008 each petitioner submitted an individual return using the “single” filing position. 38,347 from AK Nails.