Benness M. Richards and Jane Richards - Page 10

                                       - 10 -                                         

               income of $50,498 ($11,975 per the return and $38,523                  
               disallowed Kersting deductions) is $15,709, which                      
               produces a deficiency of $12,214 ($15,709 less the                     
               $3,495 reported on the return).  A seven percent                       
               reduction of this deficiency results in a deficiency of                
               $11,359, far less than the deficiency in the decision                  
               of $23,000.                                                            
                    The explanation for this discrepancy lies in the                  
               fact that several Kersting participants received                       
               notices of deficiency based on a reconstruction of                     
               records obtained from Mr. Kersting's office in 1981.                   
               For the year 1978, the statute of limitations would                    
               have expired in 1982.  Thus, the notice may have been                  
               issued without access to the original return.  Whatever                
               the reason for the discrepancy, it is clear that the                   
               Richards did not receive any kind [of] special                         
               treatment from Mr. McWade.                                             
               On November 8, 1996, Mr. Jones filed an entry of appearance            
          on behalf of petitioners and a Motion for Leave To File Motion To           
          Vacate Decision (motion for leave).  On that same date, the Court           
          lodged petitioners' Motion To Vacate Decision and Set Aside                 
          Settlement and petitioners' Memorandum of Points and Authorities.           
          Petitioners' Motion To Vacate Decision was based upon the theory            
          that the notice of deficiency issued to petitioners was invalid             
          under Scar v. Commissioner, 814 F.2d 1363 (9th Cir. 1987), revg.            
          81 T.C. 855 (1983), and, therefore, the Court lacked jurisdiction           
          to enter the stipulated decision in their case.                             
          On November 14, 1996, the Court issued a Notice of Filing                   
          directing respondent to file an objection, if any, to                       
          petitioners' motion for leave on or before December 5, 1996.                
          On November 29, 1996, respondent filed a Motion to Extend Time To           
          File Respondent's Objection to petitioners' motion for leave.  In           




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011