TAX COURT OPINION

Case: James H. Jordan
Docket Number: 13351-04
Judge: Kroupa
Opinion Type: memo
Filed: 11/17/2005
Pages: 67

D-5)TATES TAX CO11RT PE T!T!T S James H. Jordan, 20f I"3 -9 2 10 10 Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent. NITED STATES m C0 FI n MAR u 9 2006 Docket No. 13351-04 PETITIONER'S RESPONSE TO RESPONDENT'S CALCULATIONS FOR ENTRY OF DECISION Petitioner agrees with most of the computations of the Respondent, provided these objections to the respondent before the most recent set calculations was provided to the Court. nra Petitioner agrees with all of Respondent's Calculations of the Ta , 6651(a)(1) penalty. Petitioner also agrees with the Respondent's calcul the penalty assessed under IRC. § 6654(a) for the years ending Decem 1997, 2000, 2001, and 2002. Respondent asserts that the correct calculÀtionif the Petitioner's Penalty for the years 1997 and 1998, is annexed hereto on forms 2210 for each of those years, and that, in fact, the penalty for 1998 is correctly $229.91 for the year 1998, and $333.92 for 1999. Forms 2210 promulgated by the Internal Revenue Service for those years are attached, with the correct computations. In addition, Respondent objects to the Tax Year Interest Computations for every year. The interest on the failure to file penalty assessed under 11 U.S.C. § 6651(a)(1) is properly calculated from the due date of the return, which SERVED MAR 1 3 2006 is October 15, of each year, since he obtained valid extensions of time to file his returns every year. 26 U.S.C. § 6601(e)(2)(B). Lastly, payment is not due on the tax returns from April 15 every year, nor are the returns due on October 15 of every years. In years in which April 15 is a Saturday, or a Sunday, the tax is not due until April 16 or 17. Interest on the tax can only be computed from the date the tax is due. Similarly, when October 15 falls on a Saturday or a Sunday, the return (with extensions) is not due until October 16 or 17. This is the date when the interest on the penalty for failing to file a return is due. Therefore interest on the 1999 tax should begin on April 17, 2000, and interest on the 2000 tax should begin on April 16, 2001. Interest on the 1999 failure to file penalty begins to run on October 16, 2000. Attached hereto following the 1998 and 1999 forms 2210 are the correct interest calculations for the interest through March 31, 2006, taking into account the original and extended due dates of the returns, and the fact that the interest on the penalty is not due until The Respondent's calculations are therefore accepted for the most part, with the modifications noted herein. Dated: March 3, 2006 KEATE LAW FIRM I By: Ke neth E. Keate Attorney for Petitioner 1102 Grand Avenue St. Paul, MN 55105 (651) 224-5079 Tax Court Bar No. KK0090 * £210 separtment of the Treasury Internal Revenue Service Name(s) Shown on Tax Return Estimated Tax by Individuals, Estates and Trusts U"d**ªY"*"t d * Attach to Form 1040, 1040A, 1040NR, 1040NR-EZ, or 1041. * See separate instructions. °-- 06 Identifying Number Note: In most cases, you do not need to file Form 2210. The IRS will figure any penaltyyou owe and send you a bill. File Form 2210 only if one or more boxes in Part I apply to you. If you do not need to file Form 2210, you still may use it to figure your penalty. Enter the amount from Part lil, line 21, or Part IV, line 35, on the penalty line ofyour return, but do not attach Form 2210. }Part i . . I Reasons for Filing - If la, 1b, or 1c below applies to you, you may be able to lower or eliminate your penalty. But you must check the boxes that apply and file Form 2210 with your tax return. If Id below applies to you, check that box and file Form 2210 with your tax return. 1 Check whichever boxes apply (if none apply, see the Note above): a b c You request a waiver. In certain circumstances, the IRS will waive all or part of the penalty. See Waiver of Penalty in the instructions. u pse the,annualized income installment method. If your income varied during .the.yearvthis method may reduce the amount of one or more required installments. See the instructions. You had federal income tax withheld from wages and, for estimated tax purposes, you treat the withheld tax as paid on the dates it was actually withheld, instead of in equal amounts on the payment due dates. See the instructions for line 23. (cid:16)042 Your required annual payment (line 14 below) is based on your 1997 tax and you filed or are filing a joint return for either 1997 or 1998 but not for both years. Part || | Required Annual Payment 2 Enter your 1998 tax after credits (see instructions) ........................................................ 3 Other taxes (see instructions) ........................................................................... 4 Add lines 2 and 3....................................................................................... 5 Earned income credit ........................................................ 6 Additional child tax credit .................................................... 7 Credit for federal tax paid on fuels ............................................ 8 Add lines 5, 6, and 7 ................................................................................... 9 Currentyear tax. Subtractline8fromline4 .............................................................. 10 IMultiply line S by 90% (.90) ..................................................h10 11 Withholding taxes. Do not include any estimated tax payments on this line (see instructions) 5 6 7 . . . . . . . . . . . . . . . . 2 3 4 8 9 . 11 12 . 13 . 14 12 Subtract line 11 from line 9. If less than $1,000, stop here; do not complete or file this form. You do not owe the penalty ............................................................................................. . . Enter the tax shown on your 1997 tax retum. Caution: See instructions . Required annual payment. Enter the smaller of line 10 or line 13 . . . . . Note: If line 11 is equal to or more than line 14, stop here; you do not owe the penalty. Do not file Form 2210 unless you checked box id above. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Part |Il Short Method (Caution: See the instructions to find out if you can use the short method. Ifyou checked box 1b or 1c in Part I, skip this part and go to Part IV.) 15 Enter the amount, if any, from line 11 above . . . . 16 Enter the total amount, if any, of estimated tax payments you made . 17 Add ines 15 and 16 ..................................................................... ............. . 15 . 16 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Total underpayment for year. Subtract line 17 from line 14. If zero or less, stop here; you do not owe the penalty. Do not file Form 2210 unless you checked box id above ....................................... 19 Multiply line 18 by .05043 ............................................................................... 20 (cid:16)042If the amount on line 18 was paid on or after 4/15199, enter -0.. 18 19 U t-- rNT 1 0 J / 2 M*I, N (cid:16)042If the amount on line 18 was paid before 4/15/99, make the following computation to find the amount to enter on line 20. Amount on line 18 x Number of days paid before 4/15/99 x .00019 .......... . .. ... ... . .. . .. . 20 21 Penalty. Subtract line 20 from line 19. Enter the result here and on Form 1040, line 69; Form 1040A, line 44; Form 1040NR, line 68; Form 1040NR-EZ, line 27; or Form 1041, line 26 . . . BAA For Paperwork Reduction Act Notice, see separate instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . * 21 t / Form 2210 (1998) FDIZO312 12/22/98 10 Oepartment of the Treasury internal Revenue Service Name(s) Shown on Tax Return Estimated Tax by Indivi uals, Estates and Trusts °"d*' '"*"(cid:16)442 * Attach to Form 1040, 1040A, 1040NR, 1040NR-EZ, or 1041. (cid:16)042See separate instructions, """"- ggg 06 Identifying Number Note: In most cases, you do not need to file Form 2210. The IRS will figure any penalty you owe and send you a bill. File Form 2210 only if one or more boxes in Part I apply to you. Ifyou do not need to file Form 2210, you still may use it to figure your penalty. Enter the amount from Part lit, line 21, or Part IV, line 35, on the penalty line ofyour return, but do not attach Form 2210. RM!!! Reasons for Filing - If la, lb, or ic below a plies to you, you may be able to lower or eliminate your penalty. But you must check the boxes that apply and file Form 2210 with your tax return. If 1d below applies to you, check that box and file Form 2210 with your tax return. 1 Check whichever boxes apply (if none apply, see the Note above): a b c You request a waiver. In certain circumstances, the IRS will waive all or part of the penalty. See Waiver of Penalty in the instructions. You use the annualized income installment method, if your income varied during the year, this method may reduce the=arfiount of one or more required installments. S6e the instructions. You had federal income tax withheld from wages and, for estimated tax purposes, you treat the withheld tax as paid on the dates it was actually withheld, instead of in equal amounts on the payment due dates. See the instructions for line 23. (cid:16)042 Your required annual payment (line 14 below) is based on your 1998 tax and you filed or are filing a joint return for either 1998 or 1999 but not for both years. È!NEK (cid:0)541!(cid:0)541i!!(cid:0)541il Required Annual Payment 2 Enter your 1999 tax after credits (see instructions) ...................................................... 3 Other taxes (see instructions) ......................................................................... 4 Add lines 2 and 3 ............................................................. . .................... 5 5 Earnedincome credit ...................................................... 6 Additional child tax credit ................................................... 6 7 Credit for federal tax paid on fuels........................................... 7 8 Add lines 5, 6, and 7 ................................................................................. 9 Current year tax. Subtract line 8 from tine 4 ........................................................... 10 .Multiply line9by90% (.90) ............. ...................................|10 11 Withholding taxes. Do not include any estimated tax payments on this line (see instructions) . . . . . . . . . . . . . . . . . 12 Subtract line 11 from line 9. If less than $1,000, stop here; do not complete or file this form. You do not owe ........................................................................... thepenalty.... 2 3 4 8 9 11 12 (cid:16)042 Enter the tax shown on your 1998 tax return (105% of that amount if the adjusted gross income shown on that return is more than $150,000, or, if rnarried filing separately for 1999, more than $75,000). Caution: See instructions .............................................. . . .........................·...... 13 . . . 14 14 Required annual payment.Enter the smaller of line 10 or ne 13 . h ) .T If line 11 is equal to or more than line 14, stop here; you do not owe the penalty. Do not file Form 2210 unless you checked box 1d above. Note: . .. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2] 34 3 ) f'a $hort Method (Caution: See the instructions to find out if you can use the short method. Ifyou checked box 1b or 1c in Part I, skip this part and go to Part IV.) . . . . . . . . . . . 15 Enter the amount, if any, from line 11 above . . . 16 Enter the total amount, if any, of estimated tax payments you made . 17 Add ines 15 and 16 ............................................................ . 15 . 16 | . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... ........... 17 18 Total underpayment for year. Subtract line 17 from line 14. If zero or less, stop here; you do not owe the penalty. Do not file Form 2210 unless you checked box 1d above ... . .. . ....... ... ... ... . 19 Multiply line 18by.05336 .......................................... ........................... 20 (cid:16)042If the amount on line 18 was paid on or after 4/15l00, enter -0.. ... ... ..... . . ..· 18 Q 4f 19 (cid:16)042If the amount on line 18 was paid before 4/15/00, make the following computation to find the amount to enter on line 20. Amount on line 18 × Number of da before 411 100 aid x .00022 . . . . . . . . . . . . . . . . . . . . . . . . . 20 21 Penalty. Subtract line 20 from line 19. Enter the result here and on Form 1040, line 68; Form 1040NR-EZ, line 27; or Form 1041, line 26 . line 69; Form 1040A, line 44; Form 1040NR, . . BAA For Paperwork Reduction Act Notice, see separate instructions. . . . . . . . . . . . . . . . . . . . 21 > Á > ) y Form 2210 (1999) FDIZo312 12/28/99 James H. Jordan 1998 Fqderal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxinterest Version W2001.2 03-03-06 Page 1 Events Tax FTP Est tax Pen Date Event Date Amount Balance (1) 04-15-99 6,258.00 04-26-06 0.00 6,258.00 12,253.02 Interest Computation Date 03-31-06 12,192.08 (1) Balance includes any interest and penalties accrued as of the Event Date Interest Detail Tax interest Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest rest In st I I st Interest Interest Interest Interest Interest Interest 04-15-99 06-30-99 8.00 09-30-99 8.00 12-31-99 8.00 03-31-00 8.00 06-30-00 9.00 09-30-00 9.00 12-31-00 9.00 03-31-01 9.00 06-30-01 8.00 09-30-01 7.00 12-31-01 7.00 12-31-02 6.00 09-30-03 5.00 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 6,258.00 6,258.00 6,258.00 6,363.10 6,492.70 6,624.94 6,758.02 6,910.93 7,069.04 7,230.77 7,393.01 7,541.93 7,676.17 7,812.80 8,295.88 8,611.98 8,699.24 8,786.18 8,896.08 8,985.97 9,099.61 9,212.48 9,493.80 105.10 129.60 132.24 133.08 152.91 158.11 161.73 162.24 148.92 134.24 136.63 483.08 316.10 87.26 86.94 109.90 89.89 113.64 112.87 281.32 337.19 6,363.10 6,492.70 6,624.94 6,758.02 6,910.93 7,069.04 7,230.77 7,393.01 7,541.93 7,676.17 7,812.80 8,295.88 8,611.98 8,699.24 8,786.18 8,896.08 8,985.97 9,099.61 9,212.48 9,493.80 9,830.99 Interest on Penalties Event Date Rate Base Interest Balance 6651(a)(1) Interest Interest Interest Interest Interest Interest Interest 10-15-99 12-31-99 8.00 03-31-00 8.00 06-30-00 9.00 09-30-00 9.00 12-31-00 9.00 03-31-01 9.00 06-30-01 8.00 1,564.50 1,564.50 1,591.12 1,623.08 1,659.80 1,697.77 1,736.61 1,775.57 Prepared using Taxlnterest for Windows 26.62 31.96 36.72 37.97 38.84 38.96 35.77 1,564.50 1,591.12 1,623.08 1,659.80 1,697.77 1,736.61 1,775.57 1,811.34 James H. Jordan 1998 Fgderal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Interest on Penalties Taxlnterest Version W2001.2 03-03-06 Page 2 Event Interest Interest Interest Interest Interest Interest Interest Interest st I st in erest Interest Date Rate Base Interest Balance 09-30-01 7.00 12-31-01 7.00 12-31-02 6.00 09-30-03 5.00 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 1,811.34 1,843.58 1,876.39 1,992.41 2,068.33 2,089.29 2,110.17 2,136.56 2,158.15 2,185.44 2,212.55 2,280.11 32.24 32.81 116.02 75.92 20.96 20.88 26.39 21.59 27.29 27.11 67.56 80.98 1,843.58 1,876.39 1,992.41 2,068.33 2,089.29 2,110.17 2,136.56 2,158.15 2,185.44 2,212.55 2,280.11 2,361.09 -----------------------------Summary as of03-31-06------------------------- Tax Interest Penalty interest Failure to file Deposits 0.00 0.00 Balance 6,258.00 3,572.99 0.00 0.00 796.59 1,564.50 Amount 6,258.00 3,572.99 796.59 1,564.50 Payments 0.00 0.00 0.00 0.00 Totals 12,192.08 0.00 0.00 12,192.08 P red using: FEDERAL end date: 03-31-06 IRS interest rates USER Table Prepared using Taxinterest for Windows James H. Jordan 1998 (ederal Income Tax Return PENALTY COMPUTATION DETAIL REPORT Failure to file tax return when due, 6651(a)(1) Taxpayer Name..:James H. Jordan Taxpayer |D#...:502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 3 Amount subject to failure to file pena ty....... ........: 6,258.00 Date return received by IRS.............: 04-20-05 Due date (with extensions)..............: 10-15-99 Months late, including fractions........: 67 Months used in computation (maximum of 5).......... ....: 5 Pena ty rate........... ............... ............: 5 % ss penalty computation (amount x months x rate)............: 1,564.50 offset for the failure to pay penalty....................: 0.00 Penalty before considering minimum............................: 1,564.50 Minimum penalty for Chapter 1 (income tax) returns (1)........: 100.00 PENALTY FOR FAILURE TO FILE TAX RETURN WHEN DUE...............: 1,564.50 The penalty computations are based on an original due date of: 04-15-99 The computations are based on the information entered in Taxinterest's penalty information window. The information is reproduced below: Date return was received by IRS...............: 04-20-05 Due date (with extensions)....................: 10-15-99 etax due..... .............................: 6,258.00 s the failure to file due to fraud?.........: No Apply $100 minimum rule (see below)...........: Yes (1) A minimum penalty applies to Chapter 1 (income tax) returns if the return is due after 12-31-82 and is more than 60 days late. The minimum is the lesser of 100% of the tax or $100. If the minimum penalty rule is not applied, the minimum penalty is zero. Prepared using Taxlnterest for Windows James H. Jordan 1999 Federal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 1 Events Date Event Date Amount Balance (1) Tax Estimated Tax Pen 04-17-00 35,343.00 35,343.00 04-25-06 333.92 64,077.96 Interest Computation Date 03-31-06 63,439.18 (1) Balance includes any interest and penalties accrued as of the Event Date Interest Detail t Date Rate Base Interest Balance Tax Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest est est Interest Interest Interest 04-17-00 06-30-00 09-30-00 12-31-00 03-31-01 06-30-01 09-30-01 12-31-01 12-31-02 09-30-03 12-31-03 03-31-04 06-30-04 09-30-04 12-31-04 03-31-05 09-30-05 03-31-06 9.00 9.00 9.00 9.00 8.00 7.00 7.00 6.00 5.00 4.00 4.00 5.00 4.00 5.00 5.00 6.00 7.00 35,343.00 35,343.00 35,991.93 36,815.35 37,657.61 38,502.54 39,278.10 39,977.20 40,688.74 43,204.58 44,850.79 45,305.25 45,758.05 46,330.41 46,798.57 47,390.42 47,978.26 49,443.36 35,343.00 648.93 823.42 842.26 844.93 775.56 699.10 711.54 2,515.84 1,646.21 454.46 452.80 572.36 468.16 591.85 587.84 1,465.10 1,756.08 35,991.93 36,815.35 37,657.61 38,502.54 39,278.10 39,977.20 40,688.74 43,204.58 44,850.79 45,305.25 45,758.05 46,330.41 46,798.57 47,390.42 47,978.26 49,443.36 51,199.44 Interest on Penalties Event Date Rate Base Interest Balance 6651(a)(1) Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest 10-16-00 12-31-00 9.00 03-31-01 9.00 06-30-01 8.00 09-30-01 7.00 12-31-01 7.00 12-31-02 6.00 09-30-03 5.00 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 8,835.75 8,835.75 9,002.41 9,204.40 9,389.81 9,556.94 9,727.04 10,328.48 10,722.02 10,830.66 10,938.91 11,075.74 166.66 201.99 185.41 167.13 170.10 601.44 393.54 108.64 108.25 136.83 111.92 8,835.75 9,002.41 9,204.40 9,389.81 9,556.94 9,727.04 10,328.48 10,722.02 10,830.66 10,938.91 11,075.74 11,187.66 Prepared using Taxlnterest for Windows James H. Jordan 1999federal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Interest on Penalties Taxinterest Version W2001.2 03-03-06 Page 2 Event Interest Interest Interest Interest Date Rate Base Interest Balance 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 11,187.66 11,329.15 11,469.68 11,819.93 141.49 140.53 350.25 419.81 11,329.15 11,469.68 11,819.93 12,239.74 ---------------------------- Summary as of 03-31-06 ---------------------- Amount 35,343.00 15,856.44 Payments 0.00 0.00 rest Deposits Balance 0.00 0.00 35,343.00 15,856.44 0.00 0.00 3,403.99 333.92 0.00 8,835.75 0.00 63,773.10 Penalty interest Entered penalties Failure to file 3,403.99 333.92 8,835.75 Totals 63,773.10 0.00 0.00 0.00 0.00 Prepared using: FEDERAL Table end date: 03-31-06 IRS interest rates USER Table (cid:16)042 Prepared using Taxinterest for Windows James H. Jordan 1999 federal Income Tax Return PENALTY COMPUTATION DETAIL REPORT Failure to file tax return when due, 6651(a)(1) Taxpayer Name..:James H. Jordan Taxpayer ID#...:502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 3 Amount subject to failure to file penalty.....................: 35,343.00 Date return received by IRS.............: 04-20-05 Due date (with extensions)..............: 10-16-00 Months late, including fractions........: 55 Months used in computation (maximum of 5)... ...........: 5 Pena ty rate............................. ..............: 5 % ss penalty computation (amount x months x rate)............: s offset for the failure to pay penalty....................: 0.00 8,835.75 Penalty before considering minimum............................: 8,835.75 Minimum penalty for Chapter 1 (income tax) returns (1)........: 100.00 PENALTY FOR FAILURE TO FILE TAX RETURN WHEN DUE...............: 8,835.75 The penalty computations are based on an original due date of: 04-17-00 The computations are based on the information entered in Taxinterest's penalty information window. The information is reproduced below: Date return was received by IRS...............: 04-20-05 Due date (with extensions)....................: 10-16-00 9t tax due...................................: 35,343.00 as the failure to file due to fraud?.........: No Apply $100 minimum rule (see below)...........: Yes (1) A minimum penalty applies to Chapter 1 (income tax) returns if the return is due after 12-31-82 and is more than 60 days late. The minimum is the lesser of 100% of the tax or $100. minimum penalty rule is not applied, the minimum penalty is zero. If the Prepared using Taxinterest for Windows James H. Jordan 2000 Feqeral Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 1 Events . Tax Estimated Tax Pen Date Event Date Amount Balance (1) 04-16-01 109,753.00 109,753.00 04-25-06 0.00 181,342.11 Interest Computation Date 03-31-06 180,474.83 (1) Balance includes any interest and penalties accrued as of the Event Date Interest Detail Tax Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest I st 04-16-01 06-30-01 09-30-01 12-31-01 12-31-02 09-30-03 12-31-03 03-31-04 06-30-04 09-30-04 12-31-04 03-31-05 09-30-05 03-31-06 8.00 7.00 7.00 6.00 5.00 4.00 4.00 5.00 4.00 5.00 5.00 6.00 7.00 109,753.00 109,753.00 109,753.00 111,571.87 113,557.70 115,578.88 122,725.27 127,401.43 128,692.34 129,978.55 131,604.38 132,934.22 134,615.41 136,285.21 140,446.91 1,818.87 1,985.83 2,021.18 7,146.39 4,676.16 1,290.91 1,286.21 1,625.83 1,329.84 1,681.19 1,669.80 4,161.70 4,988.24 111,571.87 113,557.70 115,578.88 122,725.27 127,401.43 128,692.34 129,978.55 131,604.38 132,934.22 134,615.41 136,285.21 140,446.91 145,435.15 Interest on Penalties Event Date Rate Base Interest Balance 6651(a)(1) Interest Interest . Interest Interest Interest Interest Interest Interest Interest Interest Interest 10-15-01 12-31-01 7.00 12-31-02 6.00 09-30-03 5.00 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 27,438.25 27,438.25 27,846.40 29,568.18 30,694.81 31,005.83 31,315.72 31,707.43 32,027.83 32,432.88 32,835.18 33,837.86 27,438.25 408.15 1,721.78 1,126.63 311.02 309.89 391.71 320.40 405.05 402.30 1,002.68 1,201.82 27,846.40 29,568.18 30,694.81 31,005.83 31,315.72 31,707.43 32,027.83 32,432.88 32,835.18 33,837.86 35,039.68 Prepared using Taxinterest for Windows James H. Jordan 2000 Federal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 2 --------------------------- Summary as of03-31-06------------------------- Amount 109,753.00 35,682.15 Payments 0.00 0.00 Balance 109,753.00 35,682.15 Deposits 0.00 0.00 Tax Interest Penalty interest Failure to file 7,601.43 27,438.25 0.00 0.00 0.00 0.00 7,601.43 27,438.25 Totals 180,474.83 0.00 0.00 180,474.83 Prepared using: FEDERAL Table end date: 03-31-06 IRS interest rates USER Table Prepared using Taxinterest for Windows James H. Jordan 2000 Fçderal Income Tax Return PENALTY COMPUTATION DETAIL REPORT Failure to file tax return when due, 6651(a)(1) Taxpayer Name..:James H. Jordan Taxpayer ID#...:502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 3 Amount subject to failure to file penalty.....................: 109,753.00 Date return received by IRS.............: 04-20-05 Due date (with extensions)..............: 10-15-01 Months late, including fractions........: 43 Months used in computation (maximum of 5)... ...........: 5 Penahy rate..................................................: 5 % s penalty computation (amount x months x rate)............: offset for the failure to pay penalty....................: 0.00 27,438.25 Penalty before considering m n mum............. ........: 27,438.25 Minimum penalty for Chapter 1 (income tax) returns (1)........: 100.00 PENALTY FOR FAILURE TO FILE TAX RETURN WHEN DUE...............: 27,438.25 The penalty computations are based on an original due date of: 04-16-01 The computations are based on the information entered in Taxlnterest's penalty information window. The information is reproduced below: Date return was received by IRS...............: 04-20-05 date (with extensions)....................: 10-15-01 tax due...................................: 109,753.00 s the failure to file due to fraud?.........: No Apply $100 minimum rule (see below)...........: Yes (1) A minimum penalty applies to Chapter 1 (income tax) returns if the return is due after 12-31-82 and is more than 60 days late. The minimum is the lesser of 100% of the tax or $100. minimum penalty rule is not applied, the minimum penalty is zero. If the Prepared using Taxinterest for Windows James H. Jordan 2001 Ftderal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 1 Events Date Event Date Amount Balance (1) Tax Estimated Tax Pen 04-15-02 26,357.00 26,357.00 04-25-06 0.00 40,700.71 Interest Computation Date 03-31-06 40,506.06 (1) Balance includes any interest and penalties accrued as of the Event Date nterest Detail Tax Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest 04-15-02 12-31-02 6.00 09-30-03 5.00 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 26,357.00 26,357.00 27,507.81 28,555.93 28,845.28 29,133.57 29,497.99 29,796.06 30,172.88 30,547.15 31,479.96 I est on Penalties 26,357.00 1,150.81 1,048.12 289.35 288.29 364.42 298.07 376.82 374.27 932.81 1,118.07 27,507.81 28,555.93 28,845.28 29,133.57 29,497.99 29,796.06 30,172.88 30,547.15 31,479.96 32,598.03 Event Date Rate Base Interest Balance 6651(a)(1) Interest Interest Interest Interest Interest Interest Interest Interest Interest Interest 10-15-02 12-31-02 6.00 09-30-03 5.00 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 6,589.25 6,589.25 6,673.18 6,927.45 6,997.64 7,067.58 7,155.98 7,228.29 7,319.70 7,410.50 7,636.79 6,589.25 6,673.18 6,927.45 6,997.64 7,067.58 7,155.98 7,228.29 7,319.70 7,410.50 7,636.79 7,908.03 83.93 254.27 70.19 69.94 88.40 72.31 91.41 90.80 226.29 271.24 Prepared using Taxlnterest for Windows James H. Jordan 001 lyederal Inéome Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 2 -----------------------------Summary as of03-31-06------------------------- Tax Interest Penalty interest Failure to file Amount 26,357.00 6,241.03 Payments 0.00 0.00 1,318.78 6,589.25 Deposits Balance 0.00 0.00 26,357.00 6,241.03 0.00 0.00 1,318.78 0.00 0.00 0.00 6,589.25 0.00 40,506.06 Totals 40,506.06 Prepared using: FEDERAL Table end date: 03-31-06 IRS interest rates USER Table Prepared using Taxlnterest for Windows James H. Jordan '01. frederal Income Tax Return PENALTY COMPUTATION DETAIL REPORT Failure to file tax return when due, 6651(a)(1) Taxpayer Name..:James H. Jordan Taxpayer ID#...:502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 3 Amount subject to failure to file pena ty.....................: 26,357.00 Date return received by IRS.............: 04-20-05 Due date (with extensions)..............: 10-15-02 Months late, including fractions........: 31 Months used in computation (maximum of 5)... ..........: 5 Pena ty rate........... .............. .............: 5 % ess penalty computation (amount x months x rate)............: 6,589.25 s offset for the failure to pay penalty....................: 0.00 Penalty before considering minimum............................: 6,589.25 Minimum penalty for Chapter 1 (income tax) returns (1)........: 100.00 PENALTY FOR FAILURE TO FILE TAX RETURN WHEN DUE........ 6,589.25 The penalty computations are based on an original due date of: 04-15-02 The computations are based on the information entered in Taxlnterest's penalty information window. The information is reproduced below: Date return was received by IRS...............: 04-20-05 ee date (with extensions)....................: 10-15-02 t tax due...................................: 26,357.00 Was the failure to file due to fraud?.........: No Apply $100 minimum rule (see below)...........: Yes (1) A minimum penalty applies to Chapter 1 (income tax) returns if the return is due after 12-31-82 and is more than 60 days late. The minimum is the lesser of 100% of the tax or $100. minimum penalty rule is not applied, the minimum penalty is zero. If the Prepared using Taxinterest for Windows James H. Jordan 102 Federal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxlnterest Version W2001.2 03-03-06 Page 1 Events Date Event Date Amount Balance (1) Tax Withholding Estimated Tax Pen 04-15-03 23,140.00 04-15-03 04-25-06 <704.00> 0.00 22,436.00 32,757.14 /nterest Computation Date 03-31-06 32,600.47 (1) Balance includes any interest and penalties accrued as of the Event Date Srest Detail Event Date Rate Base Interest Balance Tax Withholding Interest Interest Interest Interest Interest Interest Interest Interest Interest 04-15-03 04-15-03 09-30-03 5.00 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 23,140.00 <704.00> 23,140.00 22,436.00 22,436.00 22,958.29 23,190.92 23,422.70 23,715.68 23,955.32 24,258.28 24,559.19 25,309.15 522.29 232.63 231.78 292.98 239.64 302.96 300.91 749.96 898.90 22,958.29 23,190.92 23,422.70 23,715.68 23,955.32 24,258.28 24,559.19 25,309.15 26,208.05 est on Penalties Event Date Rate Base Interest Balance 6651(a)(1) Interest Interest Interest Interest Interest Interest Interest Interest 10-15-03 12-31-03 4.00 03-31-04 4.00 06-30-04 5.00 09-30-04 4.00 12-31-04 5.00 03-31-05 5.00 09-30-05 6.00 03-31-06 7.00 5,609.00 5,609.00 5,656.53 5,713.06 5,784.52 5,842.97 5,916.86 5,990.25 6,173.17 47.53 56.53 71.46 58.45 73.89 73.39 182.92 219.25 5,609.00 5,656.53 5,713.06 5,784.52 5,842.97 5,916.86 5,990.25 6,173.17 6,392.42 Prepared using Taxlnterest for Windows James H. Jordan 2002 Federal Income Tax Return INTEREST AND PENALTY DETAIL REPORT Taxpayer name...: James H. Jordan Taxpayer ID#....: 502-50-6377 Taxinterest Version W2001.2 03-03-06 Page 2 ----------------------- Summaryas of03-31-06----------------------- Tax Interest Penalty interest Failure to file Amount 23,140.00 3,772.05 783.42 5,609.00 Payments <704.00> 0.00 0.00 0.00 Deposits 0.00 Balance 22,436.00 0.00 0.00 0.00 3,772.05 783.42 5,609.00 Totals 33,304.47 <704.00> 0.00 32,600.47 Prepared using: FEDERAL Table end date: 03-31-06 IRS interest rates USER Table Prepared using Taxlnterest for Windows James H. Jordan 200gfederal Income Tax Return PENALTY COMPUTATION DETAIL REPORT Failure to file tax return when due, 6651(a)(1) Taxpayer Name..:James H. Jordan Taxpayer ID#...:502-50-6377 Taxinterest Version W2001.2 03-03-06 Page 3 Amount subject to failure to file pena ty.....................: 22,436.00 Date return received by IRS.............: 04-20-05 Due date (with extensions)..............: 10-15-03 Months late, including fractions........: 19 Months used in computation (maximum of 5).....................: 5 Pena ty rate..................................................: 5 % ss penalty computation (amount x months x rate)............: s offset for the failure to pay penalty....................: 0.00 5,609.00 Penalty before considering minimum............................: 5,609.00 Minimum penalty for Chapter 1 (income tax) returns (1)........: 100.00 PENALTY FOR FAILURE TO FILE TAX RETURN WHEN DUE...............: 5,609.00 The penalty computations are based on an original due date of: 04-15-03 The computations are based on the information entered in Taxlnterest's penalty information window. The information is reproduced below: Date return was received by IRS...............: 04-20-05 8e date (with extensions)....................: 10-15-03 .t tax due...................................: 22,436.00 Was the failure to file due to fraud?.........: No Apply $100 minimum rule (see below)...........: Yes (1) A minimum penalty applies to Chapter 1 (income tax) returns if the return is due after 12-31-82 and is more than 60 days late. The minimum is the lesser of 100% of the tax or $100. If the minimum penalty rule is not applied, the minimum penalty is zero. Prepared using Taxinterest for Windows U N I T E D S T A T E S T A X C O U R T WASHINGTON, D.C. 20217 February 10, 2006 RGY Ser ' Ca f) je Stat J *') T.T Judge Files James H. Jordan Petitioner, v. Docket No. 13351-04 (cid:16)042 COMMISSIONER OF INTERNAL REVENUE, Respondent. NOTICE OF FILING OF COMPUTATION UNDER RULE 155 Respondent has filed a computation under Rule 155 in the above-entitled case, a copy of which (is) 4has-beerrt- served. If notice of objection thereto, accompanied by an alternative computation, the Court may enter a decision in accordance with that computation. is not filed on or before March 3, 2006 , Robert R. Di Trolio Clerk of the Court SERVED g j g gg TED 5F c TAX COUó UNITED STAT COURT #NitÈRsf EX CQatá aO FEB U 0 2006 u e e JAMES H. JORDAN, O I 3 Pettitioner, ) v. ) Docket No. 13351-04 COMMISSIONER OF INTERNAL REVENUE, Respondent. ) ) RESPONDENT ' S COMPUTATION FOR ENTRY OF DECISION The attached computation is submitted, on behalf of respondent, in compliance with the Court's opinion determining the issues in this case, together with a proposed decision which is being lodged concurrently with the computation. SERVED TEB 1 0 2006 Docket No. 13351-04 - 2 - The computation is submitted without prejudice to respondent's right to contest the correctness of the decision entered herein by the Court. Date: By: DONALD L. KORB Chief Counsel Internal Revenue Service BLAINE HOLIDAY Senior Attorney (Small Business/Self-Employed) Tax Court Bar No. HB0257 Galtier Plaza 380 Jackson Street, Suite 650 St. Paul, MN 55101 Telephone: (651) 726-7340 OF COUNSEL: THOMAS R. THOMAS Division Counsel (Small Business/Self-Employed) MARTIN B. KAYE Area Counsel (Small Business/Self-Employed:Area 5) JOHN C. SCHMITTDIEL Associate Area Counsel (Small Business/Self-Employed) CC: STP-TL BH:MNB COMPUTATION STATEMENT in Re: James H. Jordan 7137 Crowne Oak Road Eden Prairie, MN 55344 Docket Number: 13351-04 Income Tax Tax l.R.C. 6651(a)(1) l.R.C. 6654(a) $ - $ - $ $ $ $ $ $ 4,559.00 - 4,559.00 6,365.00 4,559.00 1,806.00 Year December 31, 1997 Tax Liability Tax assessed and paid Statutory Deficiency to be assessed Tax Paid Payments: April 15, 1998 Total Payments Tax Liability Overpayment $ $ 6,365.00 6,365.00 Deficiency Notice mailed July 26, 2004 Barred Overpayment December 31, 1998 December 31, 1999 December 31, 2000 December 31, 2001 December 31, 2002 Less Prepayment Credit Net Additional Tax $ 6,258.00 $ 35,343.00 $ $ 1,564.50 8,835.75 $109,753.00 $ 27,438.25 $ 23,996.00 $ 23,140.00 $ 704.00 $ 22,436.00 $ $ 5,999.00 5,609.00 $ $ $ $ $ 231.79 336.52 2,277.98 958.96 747.13 y i Form 4549 Department of the Treasury - Internal Revenue Service income Tax Examination Changes Name and Address of Taxpayer SS or El Number Page 1 Return Form No: of 4 James H. Jordan 1. Adjustments to Income a. Pensions and Annuities b. Schedule C1 C. Itemized Deductions d. Exemptions e. SE AGI Adjustment f. Schedule C2 g. Interest Income h. l. W l. m. n. o. 2. Total Adjustments 3. Taxable Income Per Return or as Previously Adjusted 4. Corrected Taxable income Tax Method Filing Status 5. Tax 6. Additional Taxes / Alternative Minimum Tax 7. Corrected Tax Liability 8. Less Credits a. b. c. d. 9. Balance (Line 7 less total of lines 8a through 8d) 10. Plus a. Tax on oualified plans b. Self Employment Tax Other Taxes c. d. 502-50-6377 1040 Person with whom examination changes were discussed. Name and Title: Period End 12/31/1997 Period End2/31/1998 Period End12/31/1999 31,831.00 (17,313.00) (46.00) (5,300.00) 25,211.00 (46.00) (5,400.00) (1,781.00) 29,840.00 (10.00) (1,595.00) (400.00) 91,223.00 16.00 9, 172 . 00 0.00 9,172.00 17 , 984 . 00 0.00 17,984.00 119 , 074 . 00 0.00 119,074-00 TAx TABLE TAX TABLE TAX RATE Married separate Married separate Married separate 1,376.00 2,696.00 34,544.00 1, 376.00 2, 696.00 34 , 544 .00 1, 376.00 3,183.00 2, 696 .00 34 , 544 .00 3,562.00 799.00 11. Total Corrected Tax Liability(line9 plusline 10a-10d) 12. Total Tax Shown on Return or as Previously Adjusted 13. Adjustments to: a. Special Fuels Credit 4,559.00 0.00 6,258.00 0.00 35,343.00 0.00 b. c. 14. Deficiency-Increase in Tax or (Overassessment Decrease in Tax) (Line 11 less 12 adjusted by 13) 15. Adjustments to Prepayment Credits 16. Balance Due or (Overpayment) (Line 14 adjusted by Line 15) ( Excluding interest and penalties) 4, 559.00 6, 365.00 6, 258 .00 35, 343.00 (1, 806.00) 6, 258 .00 35, 343.00 The Internal Revenue Service has agreements with State tax agencies under which information about Federal tax, including increases or decreases, is exchanged with the States. If this change affects the amount of your State income tax, you should file the State form. You may be subject to backup withholding if you underreport your interest, dividend, or patronage dividend income and do not pay the required tax. The IRS may order backup withholding at 31 percent after four notices have been issued to you over a 120-day period and the tax has been assessed and remains unpaid. RGS Version 6 . 2 0 . 00 Form CG-4549 Department of the Treasury - Internal Revenue service income Tax Examination Changes SS or El Number Page 2 Return Form No: of 4 502-50-6377 1040 Period End 12/31/1997 Period End12/31/1998 Period End 12/31/1999 1,564.50 231.79 8,835.75 336.52 Form 4549 Name and Address of Taxpayer James H. Jordan 17. Penalties a.Delq-IRC 6651(a)(1) b.Estimated Tax-IRC 6654 C. d. e. f. 9. h. m. n. 18. Total Penalties Underpayment attributable to negligence: (1981-1987) A tax addition of 50 percent of the interest due on underpayment will accrue until paid or assessed Underpayment attributable to fraud: (1981-1987) A tax addition of 50 percent of the interest due on underpayment will accrue until paid or assessed Underpayment attributable Tax Motivated Transactions TMT interest will accrue and be assessed at 120% of underpayment rate in accordance with IRC 6621(c) 19. Summary of Taxes, Penalties and Interest: a. Balance due or Overpayment Taxes - Line 16, Page 1 b. Penalties(Line18, Page2)-computedto 01/23/2006 Oc. Interest(IRC§ 6601)-computedto 02/22/2006 d. TMT Interest - computed o2/22/2006 on TMT underpayment e. Amount due or refund (sum of lines a, b, c and d) Other Information: 1, 796 . 29 9 , 172 . 27 0.00 (1, e os .00) 0.00 o.00 (1, e o s . 00) 0 · 00 6, 258 . oo 1,796.29 4,379.35 0.00 12 , 433 . 64 0.00 35, 343 . oo 9,172.27 19,399.31 0.00 6 3 , 914 . 58 Examiner's Signature: Employee ID: Office: Date: MNB 01/23/2006 Consent to Assessment and Collection - I do not wish to exercise my appeal rights with the Internal Revenue Service or to contest in the United States Tax Court the findings in this report. Therefore, I give my consent to the immediate assessment and collection of any increase in tax and penalties, and accept any decrease in tax and penalties shown above, plus additional interest as provided by law. It is understood that this report is subject to acceptance by the Area Director. Area Manager or Director of Field Operations PLEASE NOTE: If a joint return was filed, BOTH taxpayers must sign By: Signature of Taxpayer Signature of Taxpayer Date Date 3-26-585 Date Title , e e Form 4549 Department of the Treasury - Internal Revenue service Income Tax Examination Changes . . Name and Address of Taxpayer SS or El Number James H. Jordan Page 3 Return Form No: of 4 Person withwhom examination changes were discussed. Name and Title: Period End12/31/20oo Period End2/3v2oo1 Period End12/3u2002 (1,303.00) 148,081.00 157,185.00 (2,105.00) (826.00) (1,303.00) 107,023.00 6,853.00 (92.00) (18,851.00) (2,262.00) (2,268.00) 88,579.00 4,987.00 (353.00) (2,401.00) (3,000.00) 3,518.00 1. Adjustments to income a. Self-Employed Health Insurance b. schedule C2 c. Schedule C1 d. SE AGI Adjustment e. Itemized Deductions f. Exemptions g. Pensions and Annuities h. 1. k. 1. m. n. o. 2. Total Adjustments 3. Taxable Income Per Return or as Previously Adjusted 4. Corrected Taxableincome Tax Method Filing Status 5. Tax 6. Additional Taxes / Alternative Minimum Tax 301,032·00 0·00 301,032.00 91,368.00 0·00 91, 368.00 89,062.00 0.00 89, 062.00 TAx RATE TAx TABLE TAX TABLE Married separate Married separate Married separate 105,543.00 23,812.00 22,083.00 7. Corrected Tax Liability 105,543.00 23, 812.00 22, 083.00 98. Less Credits a. b. c. d. 9. Balance (Line 7 less total of lines 8a through 8d) 10. Plus Other Taxes a. Self Employment Tax b. Tax on Qualified Plans c. d. 11. Total Corrected Tax Liability(line9 plus line 10a-10d) 12. Total Tax Shown on Return or as Previously Adjusted 13. Adjustments to: a. Special Fuels Credit b. c. 14. Deficiency-increase in Tax or (Overassessment Decrease in Tax) (Line 11 less 12 adjusted by 13) 15. Adjustments to Prepayment Credits 16. Balance Due or (Overpayment) (Line 14 adjusted by Line 15) ( Excluding interest an d penalties) 105, 543 . 00 4,210.00 23, 812.00 184.00 22, 083 .00 705.00 352.00 109,753.00 0.00 23,996.00 0.00 23,140.00 0.00 109, 753·00 23, 996.00 23, 140·00 704 .00 10 9 , 7 53 . 00 2 3 , 99 6 . 00 22 , 4 3 6 . 0 0 The Internal Revenue Service has agreements with State tax agencies under which information about Federal tax, including increases or decreases, is exchanged with the States. If this change affects the amount of your State income tax, you should file the State form. You may be subject to backup withholding if you underreport your interest, dividend, or patronage dividend income and do not pay the required tax. The IRS may order backup withholding at 31 percent after four notices have been issued to you over a 120-day period and the tax has been assessed and remains unpaid. RGS Version 6 . 2 0 . 00 Form CG-4549 Form 4549 Name and Address of Taxpayer James H. Jordan 17. Penalties 8.Delq-IRC 66Sl(a)(1) b. Estimated Tax-IRC 6654 Department of the Treasury - Internal Revenue service income Tax Examination Changes SS or El Number Page 4 Return Form No: of 4 502-50-6377 1040 Period End 12/31/2000 Period End12/31/2001 Period End 12n1/20oz 27,438.25 2,277.98 5,999.00 958.96 5,609.00 747.13 C. d. e. f. 9. h. n. 18. Total Penalties 29, 716 . 23 6 , 957 . 96 6 , 356 .13 Underpayment attributable to negligence: (1981-1987) A tax addition of 50 percent of the interest due on underpayment will accrue until paid or assessed Underpayment attributable to fraud: (1981-1987) A tax addition of 50 percent of the interest due on underpayment will accrue until paid or assessed Underpayment attributable Tax Motivated Transactions TMT interest will accrue and be assessed at 120% of underpayment rate in accordance with IRC 6621(c) 19. Summary of Taxes, Penalties and interest: a. Balance due or Overpayment Taxes - Line 16, Page 1 b. Penalties (Line 18, Page 2)-computed to 01/23/2006 c. Interest(IRC§ 6601)-computedto 02/22/2006 ed. TMT Interest - computed 02/22/2006 on TMT underpayment e. Amount due or refund (sum of lines a, b, c and d) Other Information: 0 · 00 109, 753 - 00 29, 716 . 23 43, 356 . 93 o. oo 182, 826 .16 0 · 00 23 , 996 - 00 6 , 957 . 96 6, 840.17 o. oo 37, 794 . 13 0 - 00 22, 436 . oo 6 , 356 .13 4 , 483.44 o. oo 33, 275.57 Examiner's Signature: Employee ID: Office: Date: MNB 01/23/2006 Consent to Assessment and Collection - I do not wish to exercise my appeal rights with the Internal Revenue Service or to contest in the United States Tax Court the findings in this report. Therefore, I give my consent to the immediate assessment and collection of any increase in tax and penalties, and accept any decrease in tax and penalties shown above, plus additional interest as provided by law. It is understood that this report is subject to acceptance by the Area Director, Area Manager or Director of Field Operations PLEASE NOTE: If a joint return was filed, BOTH taxpayers must sign By: signature of Taxpayer Signature of Taxpayer Date Date 3-26-585 Date Title FORM 886-A NAME OF TAXPAYER James H. Jordan EXPLANATION OF ITEMS SCHEDULE NUMBER 2 YEAR/PERIOD ENDED 1997, 1998, 1999, 2000, 2001, 2002 In accordance with the opinion of the U.S. Tax Court, the tax returns submitted after the notice of deficiency was issued have been accepted and the liabilities are as follows: Year 1997 1998 1999 2000 2001 2002 Schedule C Gross Receipts Adjusted Gross Income Taxable Income $119,784.00 $ 14,518.00 $ 9,172.00 $104,368.00 $ 23,430.00 $ 17,984.00 $ 181,172.00 $120,679.00 $119,074.00 Total Tax $ $ $ 4,559.00 6,258.00 35, 343.00 $ 387,456.00 $301, 858.00 $301,032.00 $ 109,753.00 $195,443.00 $112,481.00 $ 91,368.00 $168,660.00 $ 94,463.00 $ 89,062.00 $ $ 23,996.00 23,140.00 It is furthered determined that petitioner had $6,365 of tax withheld in 1997 which results in an overpayment of $1,806 in 1997. Petitioners return for 1997 reflects an overpayment and the refund of that overpayment is time barred. It is furthered determined that petitioner had $704 of tax withheld in 2002 which reduces the tax liability in 2002 by this amount. It is furthered determined that petitioners return for 1997 reflects an overpayment and the additions to tax under Section 6651(a)(1) and Section 6654 are not applicable for this year. (cid:16)042It is furthered determined that petitioner is liable for additions to tax under Section 6651(a)(1) and Section 6654 for the tax years 1998 through 2002 on the revised liabilities as shown above. See computations on the attached schedules. Name Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 1997 - SCHEDULE A - ITEMlZED DEDUCTIONS PER RETURN PER EXAM ADJUSTMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,089.00 0.00 46.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 290.00 0.00 0.00 46.00 0.00 0.00 (46.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (46.00) 46.00 0.00 46.00 37.00 14,518.00 60,600.00 0.00 0.00 0.00 46.00 1. Medical, dental and insurance premiums 2. 7.50% of Adjusted Gross 3. Net Medical and Dental income Expense 4. Taxes 5. Home Interest Expense 6. Investment Interest 7. Other Interest Expense 8. Total Interest Expense (cid:16)0429. Contributions 10. Casualty and theft Losses 11. Miscellaneous deductions subject to AGI limit 12. 2.00% of Adjusted Gross Income 13. Excess Miscellaneous deductions 14. Other Miscellaneous deductions 15. Total itemized deductions (Sum of Lines 3, 4, 8, 9,10,13, and 14 less any applicable limitation) ITEMlZED DEDUCTIONS WORKSHEET - PER EXAM A. Total of lines 3, 4, 8, 9, 10, 13, and 14 (cid:16)042B. Total of lines 3, 6, 10, (plus any gambling losses included on line 14) Itemized Deduction Limitation C. Line A less Line B D. Multiply the amount on line C by 80% E. Adjusted Gross Income from Form 1040 F. G. Line E less Line F H. Multiply the amount on Line G by 3% 1. Enter the smaller of Line D or Line H J. Total itemized Deductions (entered on line 15 above) Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 1997 - EXPLANATION OF THE ESTIMATED TAX PENALTY Since you did not pay sufficient estimated tax, addition to the tax is charged as shown below, in accordance with Section 6654(a) of the Internal Revenue Code. 1. Total corrected tax liability, Form 4549, line 11 (Tax Per Return, if a return was filed) 2. Withholding taxes 3. Line 1 less line 2 (if less than $500, estimated penalty does not apply) 0% of line 1 5. Prior year tax liability (110% of tax if AGI was more than $150,000. or if MFS more than $75,000.) 6. The smaller of line 4 or 5 (as adjusted) 7. Payment Due Date 8. Payment Required 9. Payments & Credits 10. Overpayment from Line 16 Total of Lines 9 & 10 12. Previous Qtr Underpayment 13. 11 minus 12 14. Remaining Underpayment 15. Underpayment 16. Overpayment 17. Penalty 18. Previously Assessed Penalty 19. Estimated Tax Penalty Apr 15, Jun 15, Sep 15, Jan 15, 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4,559.00 6,365.00 (1,806.00) 4,103.10 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Name Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 1998 - SCHEDULE A - ITEMlZED DEDUCTIONS PER RETURN PER EXAM ADJUSTMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,757.00 0.00 46.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 469.00 0.00 0.00 46.00 0.00 0.00 (46.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (46.00) 46.00 0.00 46.00 37.00 23,430.00 62,250.00 0.00 o og 0.00 46.00 1. Medical, dental and insurance premiums 2. 7.50% of Adjusted Gross Income 3. Net Medical and Dental Expense 4. Taxes 5. Home Interest Expense 6. Investment interest 7. Other Interest Expense 8. Total Interest Expense 9. Contributions (cid:16)04210. Casualty and theft Losses 11. Miscellaneous deductions subject to AGI limit 12. 2.00% of Adjusted Gross income 13. Excess Miscellaneous deductions 14. Other Miscellaneous deductions 15. Total itemized deductions (Sum of Lines 3, 4, 8, 9,10,13, and 14 less any applicable limitation) ITEMlZED DEDUCTIONS WORKSHEET - PER EXAM A. Total of lines 3, 4, 8, 9, 10, 13, and 14 B. Total of lines 3, 6, 10, (plus any gambling (cid:16)042losses included on line 14) Itemized Deduction Limitation C. Line A less Line B D. Multiply the amount on line C by 80% E. Adjusted Gross Income from Form 1040 F. G. Line E less Line F H. Multiply the amount on Line G by 3% 1. Enter the smaller of Line D or Line H J. Total itemized Deductions (entered on line 15 above) Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 1998 - SCHEDULE SE - COMPUTATION OF SELF-EMPLOYMENT TAX Primary James H. Jordan 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 8. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) Secondary 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 (cid:16)0428. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) 502-50-6377 25,211.00 23,282.36 0.00 0.00 23,282.36 68,400.00 0.00 0.00 o go 68,400.00 2,887.01 675.19 3,562.20 0.00 0.00 0.00 0.00 0.00 68,400.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Name of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 EXPLANATION OF THE DELINQUENCY PENALTY Since your income tax return was not filed within the time limit prescribed by law and/or the tax was not paid, and you have not shown that such failure was due to reasonable cause, an addition to the tax is charged as shown below, in accordance with Section 6651(a)(1) and/or Section 6651(a)(2) of the Internal Revenue Code. 1998 - DELINQUENCY PENALTY 1. Delinquency penalty abated 2. Date return due 3. Date return filed (cid:16)0424. Failure to File penalty rate 5. Failure to Pay penalty rate 04/15/1999 01/23/2006 0.250 0.000 6. Total corrected tax, Form 4549, line 11 7. Payments on or prior to due date of return 8. Line 6 less line 7 9. Failure to File Penalty - line 8 multiplied by line 4 10. Minimum penalty if over 60 days delinquent 11. Failure to File Penalty - Greater of line 9 or line 10 12. Previously assessed Failure to File Penalty 13. Net Failure to File Penalty - line 11 less line 12 . 14. Failure to Pay Penalty - line 8 multiplied by line 5 15. Previously assessed Failure to Pay Penalty 16. Net Failure to Pay Penalty - line 14 less line 15 * 17. Total Delinquency Penalty - Sum of line 13 and 16 0.00 6,258.00 0.00 6,258.00 1,564.50 100.00 1,564.50 0.00 1,564.50 0.00 0.00 0.00 1,564.50 (cid:16)042 If an amount appears as the Failure to Pay Penalty, the amount only reflects the addition to tax under internal Revenue Code section 6651(a)(2) through the date of this notice. The addition to tax will continue to accrue from the due date of the return at a rate of 0.5 percent each month, or fraction thereof, of nonpayment, not exceeding 25 percent. Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 1998 - EXPLANATION OF THE ESTIMATED TAX PENALTY Since you did not pay sufficient estimated tax, addition to the tax is charged as shown below, in accordance with Section 6654(a) of the Internal Revenue Code. 1. Total corrected tax liability, Form 4549, line 11 (Tax Per Return, if a return was filed) 2. Withholding taxes 3. Line 1 less line 2 (if less than $1000, estimated penalty does not apply) . 0% of line 1 5. Prior year tax liability (110% of tax if AGI was more than $150,000. or if MFS more than $75,000.) 6. The smaller of line 4 or 5 (as adjusted) 6,258.00 0.00 6,258.00 5,632.20 4,559.00 4,559.00 7. Payment Due Date 8. Payment Required 9. Payments & Credits . Overpayment from Line 16 W. Total of Lines 9 & 10 12. Previous Otr Underpayment 13. 11 minus 12 14. Remaining Underpayment 15. Underpayment 16. Overpayment 17. Penalty 18. Previously Assessed Penalty 19. Estimated Tax Penalty Apr 15, 1998 Jun 15, 1998 Sep 15, 1998 Jan 15, 1999 1,139.75 1,139.75 1,139.75 1,139.75 0.00 0.00 1,139.75 0.00 88.37 0.00 0.00 0.00 1,139.75 0.00 1,139.75 1,139.75 0.00 73.13 0.00 0.00 0.00 2,279.50 0.00 2,279.50 1,139.75 0.00 50.15 0.00 0.00 0.00 3,419.25 0.00 1,139.75 0.00 20.14 0.00 231.79 Name Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 1999 - SCHEDULE A - ITEMlZED DEDUCTIONS PER RETURN PER EXAM ADJUSTMENT 1. Medical, dental and insurance premiums 2. 7.50% of Adjusted Gross income 3. Net Medical and Dental 4. axes 5. Home interest Expense 6. Investment interest 7. Other Interest Expense 8. Total Interest Expense 9. Contributions 10. Casualty and theft Losses 11. Miscellaneous deductions subject to AGI limit 12. 2.00% of Adjusted Gross Income 13. Excess Miscellaneous deductions 14. Other Miscellaneous deductions 15. Total itemized deductions (Sum of Lines 3, 4, 8, 9,10,13, and 14 less any applicable limitation) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9,051.00 0.00 50.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2,414.00 0.00 0.00 10.00 ITEMlZED DEDUCTIONS WORKSHEET - PER EXAM A. Total of lines 3, 4, 8, 9, 10, 13, and 14 (cid:16)042B. Total of lines 3, 6, 10, (plus any gambling losses included on line 14) Itemized Deduction Limitation C. Line A less Line B D. Multiply the amount on line C by 80% E. Adjusted Gross income from Form 1040 F. G. Line E less Line F H. Multiply the amount on Line G by 3% 1. Enter the smaller of Line D or Line H J. Total itemized Deductions (entered on line 15 above) 0.00 0.00 (50.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (10.00) 50.00 0.00 50.00 40.00 120,679.00 63,300.00 57,379.00 1,721.00 40.00 10.00 Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 1999 - SCHEDULE. SE - COMPUTATION OF SELF-EMPLOYMENT TAX Primary James H. Jordan 502-50-6377 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 8. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) Secondary 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 8. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) 29,840.00 27,557.24 0.00 0.00 27,557.24 72,600.00 91,223.00 0.00 91,223.00 0.00 0.00 799.16 799.16 0.00 0.00 0.00 0.00 0.00 72,600.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Name Of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 1999 - PERSONAL EXEMPTION WORKSHEET 1. Multiply $ 2,750.00 by the total number of exemptions claimed on Form 1040, line 6e 2. Adjusted Gross Income 3. Limitation based on Filing Status 4. Subtract line 3 from line 2 5. Divide line 4 by $2,500 ($1,250 if married filing separate) 6. Multiply line 5 by 2% and enter the result as a decimal 7. Multiply line 1 by line 6 8. Deduction for exemptions (Subtract line 7 from line 1) 01/23/2006 6.20.00 2,750.00 120,679.00 94,975.00 25,704.00 21.00 0.42 1,155.00 1,595.00 Note: If Line 4 is more than $122,500. or ($61,250. if married filling separately), a deduction for exemptions cannot be taken. Name of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 EXPLANATION OF THE DELINQUENCY PENALTY Since your income tax return was not filed within the time limit prescribed by law and/or the tax was not paid, and you have not shown that such failure was due to reasonable cause, an addition to the tax is charged as shown below, in accordance with Section 6651(a)(1) and/or Section 6651(a)(2) of the Internal Revenue Code. 1999 - DELINQUENCY PENALTY 1. Delinquency penalty abated 2. Date return due 3. Date return filed 4. Failure to File penalty rate 5. Failure to Pay penalty rate 04/15/2000 01/23/2006 0.250 0.000 6. Total corrected tax, Form 4549, line 11 7. Payments on or prior to due date of return 8. Line 6 less line 7 9. Failure to File Penalty - line 8 multiplied by line 4 10. Minimum penalty if over 60 days delinquent 11. Failure to File Penalty - Greater of line 9 or line 10 12. Previously assessed Failure to File Penalty 13. Net Failure to File Penalty - line 11 less line 12 14. Failure to Pay Penalty - line 8 multiplied by line 5 15. Previously assessed Failure to Pay Penalty 16. Net Failure to Pay Penalty - line 14 less line 15 * 17. Total Delinquency Penalty - Sum of line 13 and 16 0.00 35,343.00 0.00 35,343.00 8,835.75 100.00 8,835.75 0.00 8;835.75 0.00 0.00 0.00 8,835.75 (cid:16)042If an amount appears as the Failure to Pay Penalty, the amount only reflects the addition to tax under Internal Revenue Code section 6651(a)(2) through the date of this notice. The addition to tax will continue to accrue from the due date of the return at a rate of 0.5 percent each month, or fraction thereof, of nonpayment, not exceeding 25 percent. Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 1999 - EXPLANATION OF THE ESTIMATED TAX PENALTY Since you did not pay sufficient estimated tax, addition to the tax is charged as shown below, in accordance with Section 6654(a) of the Internal Revenue Code. 1. Total corrected tax liability, Form 4549, line 11 (Tax Per Return, if a return was filed) 2. Withholding taxes 3. Line 1 less line 2 (if less than $1000, estimated penalty does not apply) 4. 90% of line 1 5. Prior year tax liability (110% of tax if AGI was more than $150,000. or if MFS more than $75,000.) 6. The smaller of line 4 or 5 (as adjusted) 35,343.00 0.00 35,343.00 31,808.70 6,258.00 6,258.00 7. Payment Due Date 8. Payment Required 9. Payments & Credits Overpayment from Line 16 T1. Total of Lines 9 & 10 12. Previous Otr Underpayment 13. 11 minus 12 14. Remaining Underpayment 15. Underpayment 16. Overpayment 17. Penalty 18. Previously Assessed Penalty 19. Estimated Tax Penalty Apr 15, 1999 Jun 15, 1999 Sep 15, 1999 Jan 15, 2000 1,564.50 1,564.50 1,564.50 1,564.50 0.00 0.00 1,564.50 0.00 126.05 0.00 0.00 0.00 1,564.50 0.00 1,564.50 1,564.50 0.00 105.13 0.00 0.00 0.00 3,129.00 0.00 3,129.00 1,564.50 0.00 73.58 0.00 0.00 0.00 4,693.50 0.00 1,564.50 0.00 31.76 °·°° 336.52 Name Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 2000 - SCHEDULE A - ITEMlZED DEDUCTIONS PER RETURN PER EXAM ADJUSTMENT 868.00 22,639.00 0.00 131.00 0.00 0.00 0.00 0.00 4,000.00 0.00 0.00 6,037.00 0.00 0.00 826.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 . (868.00) 0.00 (131.00) 0.00 0.00 0.00 0.00 (4,000.00) 0.00 0.00 0.00 0.00 (826.00) 4,131.00 0.00 4,131.00 3,305.00 301,858.00 64,475.00 237,383.00 7,121.00 3,305.00 826.00 1. Medical, dental and insurance premiums 2. 7.50% of Adjusted Gross Income 3. Net Medical and Dental Expense 4. Taxes 5. Home Interest Expense 6. Investment Interest 7. Other Interest Expense 8. Total Interest Expense (cid:16)0429. Contributions 10. Casualty and theft Losses 11. Miscellaneous deductions subject to AGI limit 12. 2.00% of Adjusted Gross Income 13. Excess Miscellaneous deductions 14. Other Miscellaneous deductions 15. Total itemized deductions (Sum of Lines 3, 4, 8, 9,10,13, and 14 less any applicable limitation) ITEMlZED DEDUCTIONS WORKSHEET - PER EXAM A. Total of lines 3, 4, 8, 9, 10, 13, and 14 (cid:16)042B. Total of lines 3, 6, 10, (plus any gambling losses included on line 14) Itemized Deduction Limitation C. Line A less Line B D. Multiply the amount on line C by 80% E. Adjusted Gross income from Form 1040 F. G. Line E less Line F H. Multiply the amount on Line G by 3% 1. Enter the smaller of Line D or Line H J. Total itemized Deductions (entered on line 15 above) Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 2000 - SCHEDULE SE - COMPUTATION OF SELF-EMPLOYMENT TAX Primary James H. Jordan 502-50-6377 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 8. Unreported tips from Form 4137 (cid:16)0429. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) Secondary 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 (cid:16)0428. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) 157,185.00 145,160.35 0.00 0.00 145,160.35 76,200.00 148,081.00 0.00 148,081.00 0.00 0.00 4,209.65 4,209.65 0.00 0.00 0.00 0.00 0.00 76,200.00 o go 0.00 0.00 0.00 0.00 0.00 0.00 Name Of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 2000 - PERSONAL EXEMPTION WORKSHEET 1. Multiply $ 2,800.00 by the total number of exemptions claimed on Form 1040, line 6e 2. Adjusted Gross Income 3. Limitation based on Filing Status 4. Subtract line 3 from line 2 5. Divide line 4 by $2,500 ($1,250 if married filing separate) 6. Multiply line 5 by 2% and enter the result as a decimal 7. Multiply line 1 by line 6 8. Deduction for exemptions (Subtract line 7 from line 1) 01/23/2006 6.20.00 2,800.00 301,858.00 96,700.00 205,158.00 0.00 0.00 0.00 0.00 Note: If Line 4 is more than $122,500. or ($61,250. if married filling separately), a deduction for exemptions cannot be taken. Name of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 EXPLANATION OF THE DELINQUENCY PENALTY Since your income tax return was not filed within the time limit prescribed by law and/or the tax was not paid, and you have not shown that such failure was due to reasonable cause, an addition to the tax is charged as shown below, in accordance with Section 6651(a)(1) and/or Section 6651(a)(2) of the Internal Revenue Code. 2000 - DELINQUENCY PENALTY 1. Delinquency penalty abated 2. Date return due 3. Date return filed 4. Failure to File penalty rate 5. Failure to Pay penalty rate 04/15/2001 01/23/2006 0.250 0.000 6. Total corrected tax, Form 4549, line 11 7. Payments on or prior to due date of return 8. Line 6 less line 7 9. Failure to File Penalty - line 8 multiplied by line 4 10. Minimum penalty if over 60 days delinquent 11. Failure to File Penalty - Greater of line 9 or line 10 12. Previously assessed Failure to File Penalty 13. Net Failure to File Penalty - line 11 less line 12 14. Failure to Pay Penalty - line 8 multiplied by line 5 15. Previously assessed Failure to Pay Penalty 16. Net Failure to Pay Penalty - line 14 less line 15 * 17. Total Delinquency Penalty - Sum of line 13 and 16 0.00 109,753.00 0.00 109,753.00 27,438.25 100.00 27,438.25 0.00 27,438.25 0.00 0.00 0.00 27,438.25 (cid:16)042If an amount appears as the Failure to Pay Penalty, the amount only reflects the addition to tax under Internal Revenue Code section 6651(a)(2) through the date of this notice. The addition to tax will continue to accrue from the due date of the return at a rate of 0.5 percent each month, or fraction thereof, of nonpayment, not exceeding 25 percent. Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 2000 - EXPLANATION OF THE ESTIMATED TAX PENALTY Since you did not pay sufficient estimated tax, addition to the tax is charged as shown below, in accordance with Section 6654(a) of the Internal Revenue Code. 1. Total corrected tax liability, Form 4549, line 11 (Tax Per Return, if a return was filed) 2. Withholding taxes 3. Line 1 less line 2 (if less than $1000, stimated penalty does not apply) 4. 90% of line 1 5. Prior year tax liability (110% of tax if AGI was more than $150,000. or if MFS more than $75,000.) 6. The smaller of line 4 or 5 (as adjusted) 109,753.00 0.00 109,753.00 98,777.70 3QpD 38,382.00 Apr 15, 2000 Jun 15, 2000 Sep 15, 2000 Jan 15, 2001 9,595.50 9,595.50 9,595.50 9,595.50 0.00 0.00 0.00 9,595.50 0.00 9,595.50 9,595.50 0.00 714.04 0.00 0.00 0.00 19,191.00 0.00 19,191.00 9,595.50 0.00 496.96 0.00 0.00 0.00 28,786.50 0.00 9,595.50 0.00 209.00 0.00 2,277.98 7. Payment Due Date 8. Payment Required 9. Payments & Credits 0.00 Overpayment from Line 16 11. Total of Lines 9 & 10 12. Previous Otr Underpayment 13. 11 minus 12 0.00 14. Remaining Underpayment 15. Underpayment 16. Overpayment 17. Penalty 9,595.50 0.00 857.98 . 18. Previously Assessed Penalty 19. Estimated Tax Penalty Name Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 2001 - SCHEDULE A - ITEMlZED DEDUCTIONS PER RETURN PER EXAM ADJUSTMENT 1. Medical, dental and insurance premiums 2. 7.50% of Adjusted Gross 3. Net Medical and Dental income Expense 4. Taxes 5. Home Interest Expense 6. Investment Interest 7. Other Interest Expense 8. Total Interest Expense 9. Contributions 10. Casualty and theft Losses 11. Miscellaneous deductions subject to AGI limit 12. 2.00% of Adjusted Gross Income 13. Excess Miscellaneous deductions 14. Other Miscellaneous deductions 15. Total itemized deductions (Sum of Lines 3, 4, 8, 9,10,13, and 14 less any applicable limitation) ITEMIZED DEDUCTIONS WORKSHEET - PER EXAM A. Total of lines 3, 4, 8, 9, 10, 13, and 14 (cid:16)042B. Total of lines 3, 6, 10, (plus any gambling losses included on line 14) Itemized Deduction Limitation C. Line A less Line B D. Multiply the amount on line C by 80% E. Adjusted Gross Income from Form 1040 F. G. Line E less Line F H. Multiply the amount on Line G by 3% 1. Enter the smaller of Line D or Line H J. Total Itemized Deductions (entered on line 15 above) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 868.00 8,436.00 0.00 15,000.00 0.00 0.00 0.00 0.00 5,231.00 0.00 0.00 2,250.00 0.00 0.00 18,851.00 (868.00) 0.00 (15,000.00) 0.00 0.00 0.00 0.00 (5,231.00) 0.00 0.00 0.00 0.00 (18,851.00) 20,231.00 0.00 20,231.00 16,185.00 112,481.00 66,475.00 46,006.00 1,380.00 1,380.00 18,851.00 Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 2001 - SCHEDULE SE - COMPUTATION OF SELF-EMPLOYMENT TAX Primary James H. Jordan 502-50-6377 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 8. Unreported tips from Form 4137 (cid:16)0429. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) Secondary 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 (cid:16)0428. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) 6,853.00 6,328.75 0.00 0.00 6,328.75 80,400.00 107,023.00 0.00 107,023.00 0.00 0.00 183.53 183.53 0.00 0.00 0.00 0.00 0.00 80,400.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Name Of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 2001 - PERSONAL EXEMPTION WORKSHEET 1. Multiply $ 2,900.00 by the total number of exemptions claimed on Form 1040, line 6e 2. Adjusted Gross income 3. Limitation based on Filing Status 4. Subtract line 3 from line 2 5. Divide line 4 by $2,500 ($1,250 if married filing separate) 6. Multiply line 5 by 2% and enter the result as a decimal 7. Multiply line 1 by line 6 8. Deduction for exemptions (Subtract line 7 from line 1) 01/23/2006 6.20.00 2,900.00 112,481.00 99,725.00 12,756.00 11.00 0.22 638.00 2,262.00 Note: If Line 4 is more than $122,500. or ($61,250. if married filling separately), a deduction for exemptions cannot be taken. Name of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 EXPLANATION OF THE DELINQUENCY PENALTY Since your income tax return was not filed within the time limit prescribed by law and/or the tax was not paid, and you have not shown that such failure was due to reasonable cause, an addition to the tax is charged as shown below, in accordance with Section 6651(a)(1) and/or Section 6651(a)(2) of the Internal Revenue Code. 2001 - DELINQUENCY PENALTY 1. Delinquency penalty abated 0.00 04/15/2002 01/23/2006 0.250 0.000 2. Date return due (cid:16)0423. Date return filed 4. Failure to File penalty rate 5. Failure to Pay penalty rate 6. Total corrected tax, Form 4549, line 11 7. Payments on or prior to due date of return 8. Line 6 less line 7 9. Failure to File Penalty - line 8 multiplied by line 4 10. Minimum penalty if over 60 days delinquent 11. Failure to File Penalty - Greater of line 9 or line 10 12. Previously assessed Failure to File Penalty 13. Net Failure to File Penalty - line 11 less line 12 14. Failure to Pay Penalty - line 8 multiplied by line 5 15. Previously assessed Failure to Pay Penalty 16. Net Failure to Pay Penalty - line 14 less line 15 * 17. Total Delinquency Penalty - Sum of line 13 and 16 23,996.00 0.00 23,996.00 5,999.00 100.00 5,999.00 0.00 5,999.00 0.00 0.00 0.00 5,999.00 (cid:16)042If an amount appears as the Failure to Pay Penalty, the amount only reflects the addition to tax under Internal Revenue Code section 6651(a)(2) through the date of this notice. The addition to tax will continue to accrue from the due date of the return at a rate of 0.5 percent each month, or fraction thereof, of nonpayment, not exceeding 25 percent. Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 2001 - EXPLANATION OF THE ESTIMATED TAX PENALTY Since you did not pay sufficient estimated tax, addition to the tax is charged as shown below, in accordance with Section 6654(a) of the Internal Revenue Code. 1. Total corrected tax liability, Form 4549, line 11 (Tax Per Return, if a return was filed) 2. Withholding taxes 3. Line 1 less line 2 (if less than $1000' estimated penalty does not apply) 0% of line 1 5. Prior year tax liability (110% of tax if AGI was more than $150,000. or if MFS more than $75,000.) 6. The smaller of line 4 or 5 (as adjusted) 23,996.00 0.00 23,996.00 . 21,596.40 120,728.00 21,596.40 7. Payment Due Date 8. Payment Required 9. Payments & Credits 10. Overpayment from Line 16 Total of Lines 9 & 10 12. Previous Qtr Underpayment 13. 11 minus 12 14. Remaining Underpayment 15. Underpayment 16. Overpayment 17. Penalty 18. Previously Assessed Penalty 19. Estimated Tax Penalty Apr 15, 2001 Jun 15, 2001 Sep 15, 2001 Jan 15, 2002 5,399.10 5,399.10 5,399.10 5,399.10 0.00 0.00 5,399.10 0.00 373.65 0.00 0.00 0.00 5,399.10 0.00 5,399.10 5,399.10 0.00 301.46 0.00 0.00 0.00 10,798.20 0.00 10,798.20 5,399.10 0.00 203.98 0.00 0.00 0.00 16,197.30 0.00 5,399.10 0.00 79.87 0.00 958.96 Name Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 2002 - SCHEDULE A - ITEMlZED DEDUCTIONS PER RETURN PER EXAM ADJUSTMENT 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 972.00 7,085.00 0.00 0.00 0.00 0.00 0.00 0.00 3,175.00 0.00 0.00 1,889.00 0.00 0.00 2,401.00 (972.00) 0.00 0.00 0.00 0.00 0.00 0.00 (3,175.00) 0.00 0.00 0.00 0.00 (2,401.00) 3,175.00 0.00 3,175.00 2,540.00 94,463.00 68,650.00 25,813.00 774.00 774.00 2,401.00 1. Medical, dental and insurance premiums 2. 7.50% of Adjusted Gross Income 3. Net Medical and Dental Expense 4. Taxes 5. Home Interest Expense 6. Investment Interest 7. Other interest Expense 8. Total Interest Expense 9. Contributions 10. Casualty and theft Losses 11. Miscellaneous deductions subject to AGI limit 12. 2.00% of Adjusted Gross income 13. Excess Miscellaneous deductions 14. Other Miscellaneous deductions 15. Total itemized deductions (Sum of Lines 3, 4, 8, 9,10,13, and 14 less any applicable limitation) ITEMlZED DEDUCTIONS WORKSHEET - PER EXAM A. Total of lines 3, 4, 8, 9, 10, 13, and 14 (cid:16)042B. Total of lines 3, 6, 10, (plus any gambling fosses included on line 14) Itemized Deduction Limitation C. Line A less Line B D. Multiply the amount on line C by 80% E. Adjusted Gross Income from Form 1040 F. G. Line E less Line F H. Multiply the amount on Line G by 3% 1. Enter the smaller of Line D or Line H J. Total itemized Deductions (entered on line 15 above) Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 2002 - SCHEDULE SE - COMPUTATION OF SELF-EMPLOYMENT TAX Primary James H. Jordan 502-50-6377 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 8. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) Secondary 1. Self-employment income 2. Multiply line 1 by 92.35% 3. Farm Optional Method Income 4. Non Farm Optional Method Income 5. Earnings subject to self-employment tax (sum of 2, 3, 4) 6. Maximum earnings subject to social security 7. Social Security wages and tips from W-2 8. Unreported tips from Form 4137 9. Sum of lines 7 and 8 10. Line 6 less line 9 11. Multiply the smaller of line 5 or 10 by 12.40% 12. Multiply line 5 by 2.90% 13. Self-Employment Tax (sum of lines 11 and 12) . 4,987.00 4,605.49 o.00 0.00 4,605.49 84,900.00 0.00 0.00 0.00 84,900.00 571.08 133.56 704.64 0.00 0.00 0.00 0.00 0.00 84,900.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Name of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 EXPLANATION OF THE DELINQUENCY PENALTY Since your income tax return was not filed within the time limit prescribed by law and/or the tax was not paid, and you have not shown that such failure was due to reasonable cause, an addition to the tax is charged as shown below, in accordance with Section 6651(a)(1) and/or Section 6651(a)(2) of the Internal Revenue Code. 2002 - DELINQUENCY PENALTY 1. Delinquency penalty abated 2. Date return due 3. Date return filed 4. Failure to File penalty rate 5. Failure to Pay penalty rate 04/15/2003 01/23/2006 0.250 0.000 6. Total corrected tax, Form 4549, line 11 7. Payments on or prior to due date of return 8. Line 6 less line 7 9. Failure to File Penalty - line 8 multiplied by line 4 10. Minimum penalty if over 60 days delinquent 11. Failure to File Penalty - Greater of line 9 or line 10 (cid:16)04212. Previously assessed Failure to File Penalty 13. Net Failure to File Penalty - line 11 less line 12 14. Failure to Pay Penalty - line 8 multiplied by line 5 15. Previously assessed Failure to Pay Penalty 16. Net Failure to Pay Penalty - line 14 less line 15 * 17. Total Delinquency Penalty - Sum of line 13 and 16 0.00 23,140.00 704.00 22,436.00 5,609.00 100.00 5,609.00 0.00 5,609.00 0.00 0.00 0.00 5,609.00 (cid:16)042If an amount appears as the Failure to Pay Penalty, the amount only reflects the addition to tax under Internal Revenue Code section 6651(a)(2) through the date of this notice.. The addition to tax will continue to accrue from the due date of the return at a rate of 0.5 percent each month, or fraction thereof, of nonpayment, not exceeding 25 percent. Name of Taxpayer: Identification Number: James H. Jordan 502-50-6377 Total 01/23/2006 6.20.00 2002 - EXPLANATION OF THE ESTIMATED TAX PENALTY Since you did not pay sufficient estimated tax, addition to the tax is charged as shown below, in accordance with Section 6654(a) of the Internal Revenue Code. 1. Total corrected tax liability, Form 4549, line 11 (Tax Per Return, if a return was filed) 2. Withholding taxes 3. Line 1 less line 2 (if less than $1000, estimated penalty does not apply) 0% of line 1 5. Prior year tax liability (110% of tax if AGI was more than $150,000. or if MFS more than $75,000.) 6. The smaller of line 4 or 5 (as adjusted) 23,140.00 704.00 22,436.00 20,826.00 26,395.60 20,826.00 7. Payment Due Date 8. Payment Required 9. Payments & Credits 10. Overpayment from Line 16 Total of Lines 9 & 10 12. Previous Otr Underpayment 13. 11 minus 12 14. Remaining Underpayment 15. Underpayment 16. Overpayment 17. Penalty 18. Previously Assessed Penalty 19. Estimated Tax Penalty Apr 15, 2002 Jun 15, 2002 Sep 15, 2002 Jan 15, 2003 5,206.50 5,206.50 5,206.50 5,206.50 176.00 176.00 5,030.50 0.00 271.26 176.00 0.00 176.00 5,030.50 0.00 4,854.50 5,206.50 0.00 245.21 176.00 0.00 176.00 10,061.00 0.00 9,885.00 5,206.50 0.00 166.47 176.00 0.00 176.00 15,091.50 0.00 5,206.50 0.00 64.19 0.00 747.13 Name of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 HOW TO PAY YOUR TAXES ff you agree with our examination, pay now by sending a check or money order and your signed agreement. The enclosed report does not reflect any balance currently due on your account. Why it is to your advantage to pay now: (cid:16)042 Decreases future interest charges (cid:16)042 Prevents assessment of failure to pay penalty (cid:16)042 Reduces payment of nondeductible interest (cid:16)042 Eliminates further contact with us if you agree with our examination and cannot pay now: 1) Can you pay the full amount within 120 days? [ ] Yes [ ] No - - If yes, send in the signed agreement now and submit the balance due when you receive a bill. If no, you may be eligible for a payment plan. 2) If you would like us to consider an installment agreement, submit your written request or check the box below and return this flyer with your signed agreement. [ ] I would like to pay $ per month. (We encourage you to make your payments as large as possible to limit penalty and interest charges.) I would like my payment to be due on the of the month. (Please indicate a date between the 1st and 28th of the month.) You will be charged a $43 fee if your request is approved. DO NOT include the fee with this flyer. We will send you a bill for the fee when we approve your request. Please provide a telephone number where we can contact you regarding your request. Home: ( Work: ( ) ) ALSO, if you agree with our examination, PLEASE SIGN PAGE 2 OF THE REPORT (Form 4549) and return pages 1 and 2 to us. * Interest and applicable penalties will continue to accrue until your balance is paid in full. Nan7e Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 1998 TAX YEAR INTEREST COMPUTATION Interest cornputed to Total Tax Deficiency Plus Penalties* - Overvaluation - Substantial Understatement - Failure to File - Negligence - Civil Fraud - Accuracy Penalties Total Penalties Tax Deficiency and Penalties Subject to Interest $.00 $.00 $1,564.50 $.00 $.00 $.00 02/22/2006 $6,258.00 $1,564.50 $7,822.50 Type Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Effective Dates 04/15/1999--06/30/1999 07/01/1999--09/30/1999 10/01/1999--12/31/1999 01/01/2000--03/31/2000 04/01/2000--06/30/2000 07/01/2000--09/30/2000 10/01/2000--12/31/2000 01/01/2001--03/31/2001 04/01/2001--06/30/2001 07/01/2001-09/30/2001 10/01/2001--12/31/2001 01/01/2002--03/31/2002 04/01/2002--06/30/2002 07/01/2002--09/30/2002 10/01/2002--12/31/2002 01/01/2003--03/31/2003 04/01/2003--06/30/2003 07/01/2003--09/30/2003 10/01/2003--12/31/2003 01/01/2004--03/31/2004 04/01/2004--06/30/2004 07/01/2004--09/30/2004 10/01/2004--12/31/2004 01/01/2005--03/31/2005 04/01/2005--06/30/2005 07/01/2005--09/30/2005 10/01/2005--12/31/2005 01/01/2006--02/22/2006 . Days 76 92 92 91 91 92 92 90 91 92 92 90 91 92 92 90 91 92 92 91 91 92 92 90 91 92 92 53 Rate 8% 8% 8% 8% 9% 9% 9% 9% 8% 7% 7% 6% 6% 6% 6% 5% 5% 5% 4% 4% 5% 4% 5% 5% 6% 6% 7% 7% Interest $131.38 $162.00 $165.29 $166.35 $191.14 $197.63 $202.16 $202.80 S186.15 $167.80 $170.78 $145.55 $149.37 $153.30 $155.63 $128.63 $131.68 $134.81 $109.08 S108.68 S137.38 $112.37 $142.05 S141.09 $173.54 $178.I1 $211.22 $123.38 Nams Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 1998 TAX YEAR INTEREST COMPUTATION Interest computed to 02/22/2006 Type Effective Dates Days Rate Interest Total Interest Total Underpayment Total Penalties Total Amount Due $4,379.35 $6,258.00 $1,796.29 $12,433.64 Additional interest will be charged at the current rate compounded daily. Interest is charged from the original due date of the return to a date 30 days after an agreement to the additional tax is signed, or to the date of payment, if earlier. Negligence and fraud penalties, if applicable, will also continue to be charged. Generally, if notice and demand is made for payment of any amount, and that amount is paid within 21 days after the date of the notice and demand, interest on the amount paid will not be charged after the date of the notice and demand. Since additional tax is due, you may want to pay it now and limit the interest and penalty charges. * Interest on penalties became effective 7/19/1984 (1/1/1989 for negligence and fraud) and is computed from the due date of the return unless a valid extension was filed. Nar e Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 1999 TAX YEAR INTEREST COMPUTATION Interest computed to Total Tax Deficiency Plus Penalties* - Overvaluation - Substantial Understatement - Failure to File - Negligence - Civil Fraud - Accuracy Penalties Total Penalties Tax Deficiency and Penalties Subject to interest $.00 $.00 $8,835.75 $.00 $.00 $.00 (cid:16)042 Effective Dates Type Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound 04/15/2000--06/30/2000 07/01/2000--09/30/2000 10/01/2000--12/31/2000 01/01/2001--03/31/2001 04/01/2001--06/30/2001 07/01/2001--09/30/2001 10/01/2001--12/31/2001 01/01/2002--03/31/2002 04/01/2002--06/30/2002 07/01/2002--09/30/2002 10/01/2002--12/31/2002 01/01/2003--03/31/2003 04/01/2003--06/30/2003 07/01/2003--09/30/2003 10/01/2003--12/31/2003 01/01/2004--03/31/2004 04/01/2004--06/30/2004 07/01/2004--09/30/2004 10/01/2004--12/31/2004 01/01/2005--03/31/2005 04/01/2005--06/30/2005 07/01/2005--09/30/2005 10/01/2005--12/31/2005 01/01/2006--02/22/2006 Days 76 92 92 90 91 92 92 90 91 92 92 90 91 92 92 91 91 92 92 90 91 92 92 53 Rate 9% 9% 9% 9% 8% 7% 7% 6% 6% 6% 6% 5% 5% 5% 4% 4% 5% 4% 5% 5% 6% 6% 7% 7% 02/22/2006 $35,343.00 $8,835.75 $44,178.75 . Interest $833.30 $1,029.78 $1,053.34 $1,056.68 $969.93 $874.30 $889.86 $758.37 $778.28 $798.76 $810.93 $670.23 $686.13 $702.42 $568.35 $566.28 $715.80 $585.49 $740.18 $735.16 $904.24 $928.03 $1,100.57 $642.90 Narae Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 1999 TAX YEAR INTEREST COMPUTATION Interest computed to 02/22/2006 Type Effective Dates Days Rate Interest Total Interest Total Underpayment Total Penalties Total Amount Due $19,399.31 $35,343.00 $9,172.27 $63,914.58 Additional interest will be charged at the current rate compounded daily. Interest is charged from the original due date of the return to a date 30 days after an agreement to the additional tax is signed, or to the date of payment, if earlier. Negligence and fraud penalties, if applicable, will also continue to be charged. Generally, if notice and demand is made for payment of any amount, and that amount is paid within 21 days after the date of the notice and demand, interest on the amount paid will not be charged after the date of the notice and demand. Since additional tax is due, you may want to pay it now and limit the interest and penalty charges. * Interest on penalties became effective 7/19/1984 (1/1/1989 for negligence and fraud) and is computed from the due date of the return unless a valid extension was filed. Nargp Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 2000 TAX YEAR INTEREST COMPUTATION Interest computed to Total Tax Deficiency Plus Penalties* - Overvaluation - Substantial Understatement - Failure to File - Negligence - Civil Fraud - Accuracy Penalties Total Penalties Tax Deficiency and Penalties Subject to Interest $.00 $.00 $27,438.25 $.00 $.00 $.00 02/22/2006 $109,753.00 $27,438.25 $137,191.25 Type Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound (cid:16)042 Effective Dates 04/15/2001--06/30/2001 07/01/2001--09/30/2001 10/01/2001--12/31/2001 01/01/2002-03/31/2002 04/01/2002--06/30/2002 07/01/2002--09/30/2002 10/01/2002--12/31/2002 01/01/2003--03/31/2003 04/01/2003--06/30/2003 07/01/2003--09/30/2003 10/01/2003--12/31/2003 01/01/2004--03/31/2004 04/01/2004--06/30/2004 07/01/2004--09/30/2004 10/01/2004--12/31/2004 01/01/2005--03/31/2005 04/01/2005--06/30/2005 07/01/2005--09/30/2005 10/01/2005--12/31/2005 01/01/2006--02/22/2006 Days 76 92 92 90 91 92 92 90 91 92 92 91 91 92 92 90 91 92 92 53 Rate 8% 7% 7% 6% 6% 6% 6% 5% 5% 5% 4% 4% 5% 4% 5% 5% 6% 6% 7% 7% Total Interest Total Underpayment Total Penalties Total Amount Due Interest $2,304.15 $2,482.83 $2,527.03 $2,153.60 $2,210.16 $2,268.31 $2,302.87 $1,903.31 $1,948.46 $1,994.72 $1,613.99 $1,608.11 $2,032.73 $1,662.66 $2,101.94 $2,087.71 $2,567.85 $2,635.41 $3,125.40 $1,825.69 $43,356.93 $109,753.00 $29,716.23 $182,826.16 Additional interest will be charged at the current rate compounded daily. Interest is charged from the original due date of the return to a date 30 days after an agreement to the additional tax is signed, or to the date of payment, if earlier. Negligence and fraud penalties, if applicable, will also continue to be charged. Generally, if notice and demand is made for payment of any amount, and that amount is paid within 21 days after the date of the notice and demand, interest on the amount paid will not be charged after the date of the notice and demand. Since additional tax is due, you may want to pay it now and limit the interest and penalty charges. * Interest on penalties became effective 7/19/1984 (1/1/1989 for negligence and fraud) and is computed from the due date of the return unless a valid extension was filed. Namq Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 2001 TAX YEAR INTEREST COMPUTATION Interest computed to Total Tax Deficiency Plus Penalties* - Overvaluation - Substantial Understatement - Failure to File - Negligence - Civil Fraud - Accuracy Penalties Total Penalties Tax Deficiency and Penalties Subject to Interest (cid:16)042 Effective Dates Type Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound 04/15/2002--06/30/2002 07/01/2002--09/30/2002 10/01/2002--12/31/2002 01/01/2003--03/31/2003 04/01/2003--06/30/2003 07/01/2003--09/30/2003 10/01/2003--12/31/2003 01/01/2004--03/31/2004 04/01/2004--06/30/2004 07/01/2004--09/30/2004 10/01/2004--12/31/2004 01/01/2005--03/31/2005 04/01/2005--06/30/2005 07/01/2005--09/30/2005 10/01/2005--12/31/2005 01/01/2006--02/22/2006 (cid:16)042 02/22/2006 $23,996.00 $5,999.00 $29,995.00 $.00 $.00 $5,999.00 $.00 $.00 $.00 Days 76 92 92 90 91 92 92 91 91 92 92 90 91 92 92 53 Rate 6% 6% 6% 5% 5% 5% 4% 4% 5% 4% 5% 5% 6% 6% 7% 7% Interest $377.05 $462.78 $469.83 $388.31 $397.52 $406.96 $329.28 $328.08 $414.71 $339.21 $428.84 $425.93 $523.89 $537.67 $637.64 $372.47 Total Interest Total Underpayment Total Penalties Total Amount Due $6,840.17 $23,996.00 $6,957.96 $37,794.13 Additional interest will be charged at the current rate compounded daily. Interest is charged from the original due date of the return to a date 30 days after an agreement to the additional tax is signed, or to the date of payment, if earlier. Negligence and fraud penalties, if applicable, will also continue to be charged. Generally, if notice and demand is made for payment of any amount, and that amount is paid within 21 days after the date of the notice and demand, interest on the amount paid will not be charged after the date of the notice and demand. Since additional tax is due, you may want to pay it now and limit the interest and penalty charges. * Interest on penalties became effective 7/19/1984 (1/1/1989 for negligence and fraud) and is computed from the due date of the return unless a valid extension was filed. Nam Of Taxpayer: Identification Number: 502-50-6377 James H. Jordan Total 01/23/2006 6.20.00 2002 TAX YEAR INTEREST COMPUTATION Interest computed to Total Tax Deficiency Plus Penalties* - Overvaluation - Substantial Understatement - Failure to File - Negligence - Civil Fraud - Accuracy Penalties Total Penalties Tax Deficiency and Penalties Subject to Interest (cid:16)042 Effective Dates Type Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound Compound 04/15/2003--06/30/2003 07/01/2003--09/30/2003 10/01/2003--12/31/2003 01/01/2004--03/31/2004 04/01/2004--06/30/2004 07/01/2004--09/30/2004 10/01/2004--12/31/2004 01/01/2005--03/31/2005 04/01/2005--06/30/2005 07/01/2005--09/30/2005 10/01/2005--12/31/2005 01/01/2006--02/22/2006 02/22/2006 $22,436.00 $5,609.00 $28,045.00 $.00 $.00 $5,609.00 $.00 $.00 $.00 Days 76 92 92 9I 91 92 92 90 91 92 92 53 Rate 5% 5% 4% 4% 5% 4% 5% 5% 6% 6% 7% 7% Interest $293.48 $359.38 $290.78 $289.72 $366.23 $299.55 $378.70 $376.13 $462.64 $474.81 $563.09 $328.93 Total Interest Total Underpayment Total Penalties Total Amount Due $4,483.44 $22,436.00 $6,356.13 $33,275.57 Additional interest will be charged at the current rate compounded daily. Interest is charged from the original due date of the return to a date 30 days after an agreement to the additional tax is signed, or to the date of payment, if earlier. Negligence and fraud penalties, if applicable, will also continue to be charged. Generally, if notice and demand is made for payment of any amount, and that amount is paid within 21 days after the date of the notice and demand, interest on the amount paid will not be charged after the date of the notice and demand. Since additional tax is due, you may want to pay it now and limit the interest and penalty charges. * Interest on penalties became effective 7/19/1984 (1/1/1989 for negligence and fraud) and is computed from the due date of the return unless a valid extension was filed. sFoyn 2623 (Rev. April 1985) Department of the Treasury - Internal Revenue Service Schedule Number Statement of Account Name of Taxpayer: James H. Jordan Kind of Tax income Tax Year Ended Tax/Addition to Tax Docket Number 13351-04 12/31/1997 Income Tax In Reply Refer To CC:STP-TC BH:MNB Date Amount Date Amount Date Amount Date Amount 4 559.00 0.00 4,559.00 4,559 00 04/15/1998 (6,365.00) Revised Liability Assessment (Return) Additional Assessments Overassessments Total Assessments Increase (Decrease) In Assessment Revised Liability Payments Withholding Less Refimds or Credit Total Payments Balance Due (or Overpayment) ||||||||||| (6,365.00) (1,806.00) Internal Revenue Code Re erence Year Section 19 19 19 19 Tax Year Ended 12/31/1997 Barred Refund Date Return Filed Non-filer Date Agreement Signed ... Statute Extended To Deficiency Notice Mailed 7/26/2004 lilli Date Claim Filed Amount of Claim Form 3623 (Rev 4-85) s F grnw3623 (Rev. April 1985) Department ofthe Treasury - Internal Revenue Service Statement of Account Name of Taxpayer: James H. Jordan Kind of Tax Income Tax Year Ended Tax/Addition to Tax Income |||§ Docket Number 13351-04 12/31/1998 Tax 12/31/1998 IRC 6651(a)(1) Date Amount Date Amount Date 6,258.00 1,564.50 Schedule Number In Reply Refer To CC:STP-TC BH:MNB 12/3 I/1998 1RC 6654 Amount 231.79 Date Amount RevisedLiability Assessment (Retum) Additional Assessments Overassessments Total Assessments Increase (Decrease) In Assessment Revised Liability Payments Withholding (cid:16)042Less Refimds or Credit Tota Payments Balance Due (or Overpayment) Tax Year Ended o.00 6,258.00 6,258.00 0.00 1,564.50 1,564.50 0.00 231.79 231.79 $ o.co !!§ i o.co $ 000 ¶$$ 6,258.00 1,564.50 Date Return Filed Date Agreement Signed Statute Extended To Internal Revenue Code Re'erence Section Year 19 19 19 19 231.79 Deficiency Notice Mailed Date Claim Filed Amount of Claim Form 3623 (Rev 4-85) $Fogm 3623 (Rev. April 1985) Department ofthe Treasury - Internal Revenue Service Schedule Number Statement of Account Name of Taxpayer: James H. Jordan Kind of Tax Income Tax Year Ended Tax/Addition to Tax Docket Number 13351-04 12/31/1999 Income Tax 12/31/1999 IRC 6651(a)(1) Date Amount Date Amount Date 35,343.00 8,835.75 In Reply Refer To CC:STP-TC BH:MNB 12/31/1999 IRC 6654 Amount 336.52 Date Amount Revised Liability Assessment (Return) Additional Assessments Overassessments Total Assessments Increase (Decrease) In Assessment Revised Liability Payments Withholding N 0.00 35.343.00 35,343 00 0.00 8,835.75 8,835.75 § 0.00 . 336.52 336 52 Less Refimds or Credit Tot a Payments Balance Due (or Overpayment) Tax Year Ended o.00 |||||||||| o.co 0.00 35,343.00 8,835.75 Internal Revenue Code Re erence Year Section Date Return Filed Date Agreement Signed Statute Extended To 336.52 Deficiency Notice Mailed Date Claim Filed Amount of Claim 19 19 19 19 Form 3623 (Rev 4-85) Date Amount Date Amount 1 Date 109,753.00 27,438.25 In Reply Refer To CC:STP-TC BH:MNB 12/31/2000 IRC 6654 Amount 2,277.98 Date Amount 0.00 109,753.00 109,753.00 0.00 27,438.25 27,438.25 0.00 2,277.98 2,277.98 if orm 3623 (Rev. April 1985) Department of the Treasury - Internal Revenue Service Schedule Number Statement of Account Name of Taxpayer: James H. Jordan Kind of Tax income Tax Year Ended Tax/Addition to Tax Docket Number 13351-04 12/31/2000 income Tax 12/31/2000 IRC 6651(a)(1) RevisedLiability Assessment (Return) Additional Assessments Overassessments Total Assessments Increase (Decrease) In Assessment Revised Liability Payments Withholding Less Relimds or Credit Tota Payments Balance Due (or Overpayment) 0.00 109,753.00 Tax Year Ended Internal Revenue Code Reference Year Section Date Return Filed 0.00 0.00 27,438.25 Date Agreement Signed Statute Extended To 2,277.98 Deficiency Notice Mailed Date Claim Filed Amount of Claim 19 19 19 19 Form 3623 (Rev 4-85) Orgi 3623 (Rev. April 1985) Department of the Treasury - Intemal Revenue service Schedule Number Statement of Account Name of Taxpayer: James H. Jordan Kind of Tax income Tax Year Ended Tax/Addition to Tax Docket Number 13351-04 12/31/2001 Income Tax |||||| ||||||||| ||| 12/31/2001 IRC 6651(a)(1) Revised Liability Assessment (Retum) Additional Assessments Overassessments Total Assessments Increase (Decrease) In Assessment Revised Liability Payments Withholding Less Retimds or Credit Tota Payments Balance Due (or Overpayment) Tax Year Ended Date Amount Date Amount Date 23 996.00 5.999.00 In Reply Refer To CC:STP-TC BH:MNB 12/31/2001 IRC 6654 Amount 958.96 Date Amount 0.00 23,996.00 23,996.00 ... 0.00 5,999.00 5,999.00 0.00 958.96 958.96 ||§§ ||| o.co 0.00 |||||| 0.00 23,996.00 5,999.00 nternal Revenue Code Re erence Year Section Date Return Filed Date Agreement Signed Statute Extended To 958.96 Deficiency Notice Mailed Date Claim Filed Amount of Claim 19 19 19 19 Form 3623 (Rev 4-85) Orrm 3623 (Rev. April 1985) Name of Taxpayer: James H. Jordan Kind of Tax income Tax Year Ended Tax/Addition to Tax Docket Number 13351-04 12/31/2002 Income Tax Statement of Account 12/31/2002 IRC 6651(a)(1) Department ofthe Treasury - Internal Revenue Service Schedule Number Date Amount Date Amount Date 23,140.00 5 609.00 In Reply Refer To CC:STP-TC BH:MNB 12/31/2002 IRC 6654 Amount 747.13 Date Amount Revised Liability Assessment (Retum) Additional Assessments Overassessments Total Assessments Increase (Decrease) In Assessment Revised Liability Payments o.00 23,140.00 23.140.00 0.00 5,609.00 5,609.00 . (cid:16)042 0.00 747.13 747.13 Withholding 4/15/2003 (704.00) (cid:16)042 Less Refimds or Credit Tota Payments a ance Due (or Overpayment) Tax Year Ended (704.00) 0.00 ||||| o.oo 22,436.00 5,609.00 Internal Revenue Code Reference Year Section Date Return Filed Date Agreement Signed Statute Extended To 747.13 Deficiency Notice Mailed Date Claim Filed Amount of Claim 19 19 19 19 Form 3623 (Rev 4-85)