§6656 — Failure to make deposit of taxes

In the notice respondent determined additions to tax pursuant to section 6651(a) and penalties pursuant to section 6656 for the years in issue.

In the notice respondent determined additions to tax pursuant to section 6651(a) and penalties pursuant to section 6656 for the years in issue.

- 3 - [*3] failure to deposit tax pursuant to section 6656, and (4) accuracy-related penalties under section 6662(a) for negligence, summarized as follows: Penalties Tax periods Type of tax Amount Sec.

(BLREDCo) is liable for the employment tax liabilities ofits corporate division, petitioner Mainstay Business Solutions (MBS).3 We hold that it is not.

(BLREDCo) is liable for the employment tax liabilities ofits corporate division, petitioner Mainstay Business Solutions (MBS).3 We hold that it is not.

However, we hold that Emery PC has shown that its failure to timely file a Form 941, pay the tax thereon, or make timely employment tax deposits for 1Q 1999 was due to reasonable cause.

Therefore, for the reasons stated above in our discussion ofthe addition to tax under section 6651(a)(1), we hold that petitioner is not liable for the addition to tax under section 6651(a)(2) for failure to pay timely the tax due for 2009.

Without more, we hold that petitioner does not have reasonable cause for its failure to timely file tax returns, timely make Federal tax deposits, and timely pay taxes.

Without more, we hold that petitioner does not have reasonable cause for its failure to timely file tax returns, timely make Federal tax deposits, and timely pay taxes.

Without more, we hold that petitioner does not have reasonable cause for its failure to timely file tax returns, timely make Federal tax deposits, and timely pay taxes.

We hold that the identified individuals were TFT Galveston Portfolio's employees and TFT Galveston Portfolio is liable for the employmenttaxes determined with respect to those individuals; (2) whether, in addition to being liable for employmenttaxes for the fourth quarter oftaxable year 2004, TFT Galveston

We hold that the identified individuals were TFT Galveston Portfolio's employees and TFT Galveston Portfolio is liable for the employmenttaxes determined with respect to those individuals; (2) whether, in addition to being liable for employmenttaxes for the fourth quarter oftaxable year 2004, TFT Galveston

We hold that the identified individuals were TFT Galveston Portfolio's employees and TFT Galveston Portfolio is liable for the employmenttaxes determined with respect to those individuals; (2) whether, in addition to being liable for employmenttaxes for the fourth quarter oftaxable year 2004, TFT Galveston

We hold that the identified individuals were TFT Galveston Portfolio's employees and TFT Galveston Portfolio is liable for the employmenttaxes determined with respect to those individuals; (2) whether, in addition to being liable for employmenttaxes for the fourth quarter oftaxable year 2004, TFT Galveston

We hold that the identified individuals were TFT Galveston Portfolio's employees and TFT Galveston Portfolio is liable for the employmenttaxes determined with respect to those individuals; (2) whether, in addition to being liable for employmenttaxes for the fourth quarter oftaxable year 2004, TFT Galveston

We hold that the identified individuals were TFT Galveston Portfolio's employees and TFT Galveston Portfolio is liable for the employmenttaxes determined with respect to those individuals; (2) whether, in addition to being liable for employmenttaxes for the fourth quarter oftaxable year 2004, TFT Galveston

We hold that the identified individuals were TFT Galveston Portfolio's employees and TFT Galveston Portfolio is liable for the employmenttaxes determined with respect to those individuals; (2) whether, in addition to being liable for employmenttaxes for the fourth quarter oftaxable year 2004, TFT Galveston

We hold that Fountain is liable; and (18) whether Fountain is liable for penalties pursuant to section 6656.

McAlary's somewhat limited experience, and petitioner's modest operations, we hold that an hourly rate of$40 (i.e., annual compensation of$83,200) represents reasonable compensation for the various services that Mr.

We furtherhold that petitioner is not liable for additions to tax pursuant to section 6651(a)(1) or penalties pursuant to section 6656 for the taxable periods at issue with respect to Mr.

Attached to the notice is a schedule setting forth petitioner's liabilities for (1) Federal Insurance Contributions Act (FICA) taxes pursuant to sections 3101 and 3111, (2) additions to tax pursuant to section 6651(a)(1),1 and (3) penalties pursuant to section 6656, as follows: Tax Addition to tax Penalty period ended Employmenttax sec.

returns pursuant to section 6651(a)(1) for the tax periods involved; (c) whether petitioner is liable for the addition to tax for failure to timely pay pursuant to section 6651(a)(2) for the tax periods involved; and (d) whether petitioner is liable for the penalty for failure to timely deposit tax pursuant to section 6656 for the tax periods involved.

Section 6651 Addition To Tax and Section 6656 Penalty Under section 6656(a), ifa taxpayer fails to make a required deposit on the date prescribed for that deposit, a penalty equal to the applicable percentage ofthe amount ofthe underpayment, determined pursuant to section 6656(b), shall be imposed.

We hold it is not; (2) whether Appeals abused its discretion in denying petitioner's request to reallocate prior payments and deposits from the non- trust-fund portion to the trust fund portion of petitioner's employment tax liabilities.

Respondent's determinations concern Federal employment taxes reported on Form 941, Employer's Quartèrly Federal Tax Return, and a failure to deposit penalty pursuant to section 6656.

Conclusión In summary, we hold that (1) Èëtitioner is a pedper party before this dourt, ( ) Donald Cave, the assoaiate attorneys, and Mr.

- 15 - Under section 6656(a) if a taxpayer fails to make a required deposit on the dEte prescribed for that deposit, a penalty equal to the applicable percentage of the amount of the underpayment, determined pursuant to section 6656(b), shall be imposed.

Accordingly, we hold that petitioner is liable for the related FICA and FUTA taxes on the amounts deemed wages to Mr.

Respondent also determined penalties pursuant to section 6656.

The revenue agent conducting the examination thereafter discussed with her immediate supervisor her intention to assert additions to tax under - 4 - [*4] section 6651(a)(1) and (2) (for failure to timely file and pay, respectively) and penalties under section 6656 (for failure to deposit taxes) with respect to the 2010 and 2011 employmenttax liabilities.

It determined the amounts ofhis liabilities; prepared a substitute for return (SFR) for each period and type oftax; and detennined additions to tax under section 6651(a)(1) and (2) (for failure to timely file and pay, respectively) and a penalty under section 6656 (for failure to deposit taxes).

Section 6656 Penalty: Failure To Deposit Section 6656(a) imposes a penalty for a taxpayer's failure to make timely deposits oftax unless the failure was due to reasonable cause and not willful neglect. In evaluating reasonable cause under section 6656, the Court looks to the analogous provisions ofsection 6651(a)(2). See Stevens Techs., Inc. v. Com

2, Ltd., TFT #3, Ltd., TFT #4, Ltd., TFT Chateau Lafitte-WJT, Ltd., and TFT Somerset-WJT, Ltd. We hold it is not; and (3) whether TFT Galveston Portfolio is liable for additions to tax pursuant to section 6651(a)(1) and (2) and penalties pursuant to section 6656. We hold that it is so liable. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The parties’ stipulations of facts are incorporated herein by this reference. Petitioner’s Organizational Structure Petitioner, TFT

ermined that D&R was liable for the following additions to tax under section 6651(a) (2) : Year Quarter 1 Ouarter 2 Ouarter 3 Ouarter 4 Total 2005 $424.70 $624.21 $349.95 $450.99 $1,849.85 2006 465.92 620.91 641.87 462.65 2,191.35 2007 837.81 382.21 524.12 421.72 2,165.86 And the IRS determined that D&R was liable for the following penalties under section 6656: Year Quarter 1 Ouarter 2 Ouarter 3 Ouarter 4 Total 2005 .

ributors, and outside sales workers were employees for employment tax purposes for 1992. Respondent further determined that petitioner was not entitled to section 530 relief for any of these workers. Respondent also determined penalties pursuant to section 6656. OPINION I. Jurisdiction Over Amounts In its petition, petitioner disputed the amounts of the employment taxes and penalties that were set forth on the schedule accompanying the notice of determination. In keeping with our decision in Hen

The IRS also assessed additions to tax pursuant to section 6651(a)(1) for failure to timely file the tax return and section 6651(a)(2) for failure to timely pay the tax; a section 6656 penalty for failure to make deposit of taxes; and statutory interest.

arterly Federal Tax Return, with balances due for payroll tax liabilities for the periods ending December 31, 2020, and March 31, June 30, September 30, and December 31, 2022.2 Petitioner incurred additions to tax under section 6651(a)(2) for failure to timely pay tax owed by the original due date for all three tax periods still at issue and under section 6656 for failure to make deposit of taxes for tax periods ending June 30 and September 30, 2022.

periods at issue. Respondent determined deficiencies in employment tax, additions to tax for failure to timely file under section 6651(a)(1) and failure to timely pay under section 6651(a)(2), and penalties for failure to make deposit of taxes under section 6656. The notice stated that the last day to file a petition with this Court was November 22, 2021. Petitioner mailed a petition for redetermination of employment status to the Court via FedEx Express Saver on November 18, 2021. The petition

periods at issue. Respondent determined deficiencies in employment tax, additions to tax for failure to timely file under section 6651(a)(1) and failure to timely pay under section 6651(a)(2), and penalties for failure to make deposit of taxes under section 6656. The notice stated that the last day to file a petition with this Court was November 22, 2021. Petitioner mailed a petition for redetermination of employment status to the Court via FedEx Express Saver on November 18, 2021. The petition

Served 04/12/22 2 [*2] taxes,2 additions to tax under section 6651(a)(1), failure-to-deposit penalties under section 6656, and accuracy-related penalties under section 6662(a) in the following amounts with respect to the following taxable periods (periods at issue) during the years at issue: Taxable Type period of Additions to tax/penalties ending tax Amount § 6651(a)(1) § 6656 § 6662(a) 12/31/2016 940 $8,228 -0- $823 $1,646 3/31/2016 941 101,066 -0- 1,91

Petitioner’s sole source of income during the periods at issue was from tuition charged for 3 Respondent concedes that petitioner is not liable for penalties under section 6656 for the periods at issue on account of respondent’s employee’s failure to execute the required supervisory approval form for such penalties.

ner’s: (1) employment tax liabilities and related section 6651(a)(1) additions to tax for failure to timely file Forms 941, Employer’s QUARTERLY Federal Tax Return, section 6651(a)(2) additions to tax for failure to timely pay employment taxes, and section 6656 penalties for failure to timely deposit employment taxes for quarters ending March 31, June 30, and September 30, 2013 (2013 quarters);2 and (2) section 6651(a)(2) additions to tax for failure to timely pay employment taxes and section 66

The IRS also determined that petitioner was liable for employment taxes, fraud penalties under section 6663, and failure to deposit taxes penalties under section 6656 in the following amounts: 1Unless otherwise indicated, all section references are to the Internal Revenue Code of 1986, as amended and in effect for the relevant periods in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.

ds--a so-called credit elect overpayment. Against this backdrop, over several taxable periods the IRS assessed additions to tax for late filing and late payment under section 6651(a)(1) and (2), respectively, and Federal tax deposit penalties under section 6656. The IRS collected these additions to tax and penalties by applying portions ofpetitioner's employment tax deposits that otherwise would have resulted in overpayments. 5The following background facts, which are drawn from the pleadings, r

The IRS timely assessed petitioner's Form 941 liabilities for 25 calendar quarters between March 31, 2008, and December 31, 2015, as well as petitioner's Form 940 liabilities for 2008 through 2013. Some ofthese assessments were based on substitutes for returns prepared by the IRS. See sec. 6020(b). Some assessments were based on returns

Section 6651(a)(1) and Section 6656 Section 6651(a)(1) imposes an addition to tax for failing to timely file a tax return unless the taxpayer shows that the failure is due to reasonable cause and not ¹²¹See Rule 142(a); Welch v.

Section 6651(a)(1) and Section 6656 Section 6651(a)(1) imposes an addition to tax for failing to timely file a tax return unless the taxpayer shows that the failure is due to reasonable cause and not ¹²¹See Rule 142(a); Welch v.

(Heimdal), is liable for 30% withholding tax on the gross amounts ofdistributions it made to a foreign entity from 1995 through 2008; (4) whether Heimdal is liable for the failure to file addition to tax under section 6651(a)(1) for tax years 1995-2008; and (5) whether Heimdal is liable for the failure to deposit addition to tax under section 6656 for tax years 1995-2008.

(Heimdal), is liable for 30% withholding tax on the gross amounts ofdistributions it made to a foreign entity from 1995 through 2008; (4) whether Heimdal is liable for the failure to file addition to tax under section 6651(a)(1) for tax years 1995-2008; and (5) whether Heimdal is liable for the failure to deposit addition to tax under section 6656 for tax years 1995-2008.

ct and withholding tax increases (imposed under sections 3101, 3111, and 3402) and penalties as a result ofrespondent's classification ofthe equipment lease payments to petitioner's workers as wages: Tax period Proposed Proposed ending tax increase sec. 6656 penalty 3/31/05 $105,914 $1,975 6/30/05 104,557 1,907 9/30/05 104,287 1,893 12/31/05 104,117 1,885 3/31/06 90,903 1,682 6/30/06 90,615 1,668 9/30/06 90,590 1,666 12/31/06 90,206 1,647 3/31/07 109,987 2,051 6/30/07 109,960 2,050 9/30/07 108,1

He also determined that petitioner is liable for penalties under section 6656 for failing to make tax deposits and under section 6698 for failing to file its partnership returns.

The IRS accordingly determined that petitioner was liable for employmenttaxes, additions to tax under section 6651(a)(1) and (2), and a failure to deposit penalty under section 6656 in the following amounts: Additions to tax Quarter/year FICAtax FUTAtax Sec.

t and withholding tax increases (imposed under sections 3101, 3111, and 3402) and penalties as a result of respondent’s classification of the equipment lease payments to petitioner’s workers as wages: Tax period ending Proposed tax increase Proposed sec. 6656 penalty 3/31/05 $105,914 $1,975 6/30/05 104,557 1,907 9/30/05 104,287 1,893 12/31/05 104,117 1,885 3/31/06 90,903 1,682 6/30/06 90,615 1,668 9/30/06 90,590 1,666 12/31/06 90,206 1,647 3/31/07 109,987 2,051 6/30/07 109,960 2,050 9/30/07 108,

Respondent also determined additions to tax under section 6651(a)(1) of $1,564.14, $2,121.80, and $2,121.80 and penalties under section 6656 of $131.96, $179.01, and $179.01 for the taxable years 2006, 2007, and 2008, respectively.

1999) ("While the analysis in Boyle addressed penalties for failure to file a return under Section 6651·(a) (1) and not for a failure to pay or deposit taxes under Section 6651(a) (2) or Section 6656, the language concerning the standard is identical in all three provisions.

As best we can determine from the record, a portion of the underlying liability here in dispute·is attributable to the imposition of a section 6656 penalty.

The collection action stems from unpaid employment taxes reported on Form 941, Employer's Quarterly Federal Tax Return, penalties under section 6656, and additions to tax under section 6651(a) (2) with respect to the third quarter of 2005 and all four quarters of 2006.

3 - additions to tax under section 6651(a)(2) for failure to pay tax and penalties under section 6656 for .failure to make required deposits .

007, respondent determined that for 2003 and 2004 petitioner Ardmore Day Spa, Inc. (the corporation), owed employment taxes, additions to tax, and penalties as follows: 2003 2004 Employment taxes $34,509 $29,895 Sec. 6651 addition to tax 4,627 4,079 Sec. 6656 addition to tax 2,181 1,921 Sec. 6662 penalty 2,789 2,353 The issue is whether respondent properly classified certain massage therapists and cosmetologists as petitioners' employees. FINDINGS OF FACT The parties have stipulated some facts,

under section 665,1(a)(2) for failure to pay the tax shown on a return and ,a penalty under section 6656 for-failure to make deposit-of taxes .

on 6020(b), respondent prepared substitute returns for petitioner for the quarter and years mentioned above and made assessments against petitioner as follows : Quarter/ Additions to Tax Form Tax year Amount of tax Sec . 6651(a)(1) Sec . 6651(a)(2) Sec. 6656 941 12/31/05 $6,568 .93 $1,478 .01 $197 .07 $985 .33 940 2003 1,243 .78 254 .99 169 .99 -0- 940 2004 2,170 .00 459 .22 183 .69 -0- 940 2005 2,170 .00 488 .25 65 .10 -0 - 2 We use the term ."employment tax" to refer to taxes under the Federal

Respondent also determined that petitioner was liable for section 6656 and 6662(a) penalties relating to 1994 and 1995.

amended (Revenue Act section 530) ; (3) whether petitioner is subject to the addition to tax under section 6651 for failing to file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, and Form 941 , Employer's Quarterly Federal Tax Return, for the periods in issue ; and (4) whether petitioner is subject to the addition to tax under section 6656 for failing to make deposits of FICA taxes for the periods in issue .

respondent. LARO, Judge: Petitioner petitioned the Court under section 7436(a)1 to redetermine the following employment tax liabilities and additions thereto determined by respondent: Tax Period Additions to Tax Ended Employment Tax Sec. 6651(a)(1) Sec. 6656 3/1995 $2,356.20 $589.05 $117.81 6/1995 2,004.30 501.08 100.22 9/1995 1,774.80 443.70 88.74 12/1995 2,627.85 656.96 80.68 3/1996 1,300.50 325.13 65.03 6/1996 2,080.80 520.20 104.04 9/1996 841.50 210.38 42.08 12/1996 2,191.11 212.91 70.27 3/

2885, as amended (section 530), (3) petitioner owes employment taxes pursuant to sections 3111 and 3301, and (4) petitioner is liable for section 6656 and 6662(a) penalties.

ng 1993 through 1997; whether petitioner is subject to the addition to tax for failure to file Forms 941, Employer’s Quarterly Federal Tax Return, as required under section 6651 for all four quarters of each of the years in issue; and whether petitioner is subject to the addition to tax for failure to make a deposit of FICA taxes as required under section 6656 for the years in issue.

MAJORITY --- Laro, Judge: Petitioner petitioned the Court under section 7436(a) to redetermine the following employment tax liabilities and additions thereto determined by respondent: Additions to tax Tax period Employment ended tax Sec. 6651(a)(1) Sec. 6656 3/1995 $2,356.20 $589.05 $117.81 6/1995 2,004.30 501.08 100.22 9/1995 1,774.80 443.70 88.74 12/1995 2,627.85 656.96 80.68 3/1996 1,300.50 325.13 65.03 6/1996 2,080.80 520.20 104.04 9/1996 841.50 210.38 42.08 12/1996 2,191.11 212.91 70.27 3/

Barron for the fourth quarter of 1994 in the amount of $2,000, respondent’s agent further proposed increases in petitioner’s employment taxes, and additions to tax under section 6656 for failure to make deposit of taxes, for the calendar quarters in, and the calendar years of, 1994, 1995, and 1996.

439 (1954); (3) $1,743 in section 6656 penalties for failure to make timely deposits of taxes; and (4) $24,911 in section 6663 fraud penalties.

ich petitioner contests: - 2 - Re: Federal Income Tax Deficiencies: Year Deficiency 1992 $74,225 1993 94,903 Re: Deficiencies For Withholding of Income Tax At Source and Additions to Tax: Withholding Additions to Tax Year Deficiency Sec. 6651(a)(1) Sec. 6656 1992 $53,608 $13,402 $5,361 1993 107,107 26,777 10,711 All section references are to the Internal Revenue Code (the Code) in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Followi

respondent. MEMORANDUM FINDINGS OF FACT AND OPINION SWIFT, Judge: For 1990 through 1993, respondent determined deficiencies in petitioner’s Federal income taxes and additions to tax as follows: - 2 - Additions to Tax Year Deficiency Sec. 6651(a)(1) Sec. 6656 1990 $ 5,823 $ 1,456 $ 582 1991 136,238 34,060 13,624 1992 479,445 119,861 47,945 1993 265,732 66,433 26,573 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule r

nalties for negligence or substantial understatements under section 6662(a). Respondent also determined additions to tax for failure to file tax returns - 66 - under section 6651(a)(1) and additions to tax for failure to make deposit of taxes under section 6656. OPINION 1. Underpayment Due to Negligence Section 6653(a)(1)(A) (and section 6653(a)(1)) imposes an addition to tax equal to 5 percent of the underpayment of tax if any part of the underpayment is due to negligence or intentional disrega

nalties for negligence or substantial understatements under section 6662(a). Respondent also determined additions to tax for failure to file tax returns - 66 - under section 6651(a)(1) and additions to tax for failure to make deposit of taxes under section 6656. OPINION 1. Underpayment Due to Negligence Section 6653(a)(1)(A) (and section 6653(a)(1)) imposes an addition to tax equal to 5 percent of the underpayment of tax if any part of the underpayment is due to negligence or intentional disrega

nalties for negligence or substantial understatements under section 6662(a). Respondent also determined additions to tax for failure to file tax returns - 66 - under section 6651(a)(1) and additions to tax for failure to make deposit of taxes under section 6656. OPINION 1. Underpayment Due to Negligence Section 6653(a)(1)(A) (and section 6653(a)(1)) imposes an addition to tax equal to 5 percent of the underpayment of tax if any part of the underpayment is due to negligence or intentional disrega

nalties for negligence or substantial understatements under section 6662(a). Respondent also determined additions to tax for failure to file tax returns - 66 - under section 6651(a)(1) and additions to tax for failure to make deposit of taxes under section 6656. OPINION 1. Underpayment Due to Negligence Section 6653(a)(1)(A) (and section 6653(a)(1)) imposes an addition to tax equal to 5 percent of the underpayment of tax if any part of the underpayment is due to negligence or intentional disrega

nalties for negligence or substantial understatements under section 6662(a). Respondent also determined additions to tax for failure to file tax returns - 66 - under section 6651(a)(1) and additions to tax for failure to make deposit of taxes under section 6656. OPINION 1. Underpayment Due to Negligence Section 6653(a)(1)(A) (and section 6653(a)(1)) imposes an addition to tax equal to 5 percent of the underpayment of tax if any part of the underpayment is due to negligence or intentional disrega

nalties for negligence or substantial understatements under section 6662(a). Respondent also determined additions to tax for failure to file tax returns - 66 - under section 6651(a)(1) and additions to tax for failure to make deposit of taxes under section 6656. OPINION 1. Underpayment Due to Negligence Section 6653(a)(1)(A) (and section 6653(a)(1)) imposes an addition to tax equal to 5 percent of the underpayment of tax if any part of the underpayment is due to negligence or intentional disrega

he additions to tax for substantial understatement of income tax liability and increased interest; (9) whether some of petitioners are liable for withholding of tax at the source for interest, debt guarantee, consulting and management fees, royalty payments, and franchise fees; and (10) whether Medieval Dinner & Tournament, Inc., is liable for the section 6656 addition to tax for failure to deposit withholding of tax.

he additions to tax for substantial understatement of income tax liability and increased interest; (9) whether some of petitioners are liable for withholding of tax at the source for interest, debt guarantee, consulting and management fees, royalty payments, and franchise fees; and (10) whether Medieval Dinner & Tournament, Inc., is liable for the section 6656 addition to tax for failure to deposit withholding of tax.

he additions to tax for substantial understatement of income tax liability and increased interest; (9) whether some of petitioners are liable for withholding of tax at the source for interest, debt guarantee, consulting and management fees, royalty payments, and franchise fees; and (10) whether Medieval Dinner & Tournament, Inc., is liable for the section 6656 addition to tax for failure to deposit withholding of tax.

he additions to tax for substantial understatement of income tax liability and increased interest; (9) whether some of petitioners are liable for withholding of tax at the source for interest, debt guarantee, consulting and management fees, royalty payments, and franchise fees; and (10) whether Medieval Dinner & Tournament, Inc., is liable for the section 6656 addition to tax for failure to deposit withholding of tax.

Source Income of Foreign Persons) in connection with certain payments they made to foreign corporations; (2) whether petitioners are liable for additions to tax under section 6656 for failure to withhold and deposit the Federal income taxes due on such payments; and (3) whether petitioners are liable for additions to tax under section 6653(a) for negligence or intentional disregard of rules or regulations.

Source Income of Foreign Persons) in connection with certain payments they made to foreign corporations; (2) whether petitioners are liable for additions to tax under section 6656 for failure to withhold and deposit the Federal income taxes due on such payments; and (3) whether petitioners are liable for additions to tax under section 6653(a) for negligence or intentional disregard of rules or regulations.

Source Income of Foreign Persons) in connection with certain payments they made to foreign corporations; (2) whether petitioners are liable for additions to tax under section 6656 for failure to withhold and deposit the Federal income taxes due on such payments; and (3) whether petitioners are liable for additions to tax under section 6653(a) for negligence or intentional disregard of rules or regulations.

Source Income of Foreign Persons) in connection with certain payments they made to foreign corporations; (2) whether petitioners are liable for additions to tax under section 6656 for failure to withhold and deposit the Federal income taxes due on such payments; and (3) whether petitioners are liable for additions to tax under section 6653(a) for negligence or intentional disregard of rules or regulations.

0,869.00, respectively. A chart contained in the notice of liability sets forth the amounts of the deficiencies and additions to tax determined by respondent as follows: _Additions to tax_ Year Deficiency Sec. 6651 Sec. 6653(a)(1) Sec. 6653(a)(1)(A) Sec. 6656 1984 $4,891,617 $1,222,904 $244,581 - - - $489,162 1985 10,119,885 2,529,971 ^05,994 - - - 1,011,988 1986 13,506,793 3,376,698 - - - $675,340 1,350,679 A Form 5278 (Statement-Income Tax Changes) attached to the notice of liability provides