U.S. Tax Court Upholds Deficiency Determination Against Taxpayer, Imposes Failure-to-File Penalties

The U.S. Tax Court, in a memorandum decision, held that a sole proprietor operating a care facility was required to use married filing separate status and was liable for deficiencies and additions to tax after failing to file returns despite receiving substantial business income. Taxpayer, a sole proprietor operating a care facility for clients with intellectual disabilities, failed to file returns for the years at issue despite receiving over $6 million in gross receipts annually from Medicaid payments. The IRS prepared substitute returns under I.R.C. §6020(b) and determined deficiencies and additions to tax under I.R.C. §6651(a)(1), §6651(a)(2), and §6654. The ...