Short Summary: During tax years 2015 and 2016, Petitioner Nnabugwu C. Eze (“Petitioner”) reported income and expenses from two sets of activities on Schedules C—consulting in the electronic healthcare field (“Schedule C1”) and residential construction (“Schedule C2”). Petitioner reported expenses on Schedules C1 and C2 primarily related to car/truck expenses and other expenses. While Schedule C1 reported net profits in tax years 2015 and 2016, Schedule C2 reported significant net losses nearly offsetting Schedule C1’s net profit.
The IRS selected Petitioner’s 2015 and 2016 tax returns for examination and issued Petitioner a timely notice of deficiency. The IRS disallowed all car/truck expenses on Schedules C1 and C2, 90 percent of the other expenses on Schedule C1, and all of the other expenses on Schedule C2. Additionally, the IRS assessed certain accuracy-related penalties under Section 6662(a).
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