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income taxes for 1992 and 1993 of $10,778 and $56,165,
respectively. Petitioners assign error to some of respondent’s
determinations on the basis that respondent erred in treating
certain advance commissions as compensation rather than as loans.
Petitioners also claim that petitioner Sandra A. Gales is an
innocent spouse who should be relieved of liability on account of
that status.1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
FINDINGS OF FACT
Introduction
Some facts have been stipulated and are so found. The
stipulations of facts, with attached exhibits, are incorporated
herein by this reference.
Petitioners are husband and wife who, at the time the
petition was filed, resided in Sanibel, Florida. Petitioners
made joint returns of income for their taxable (calendar) years
1992 and 1993. Petitioner Sandra A. Gales is a party herein by
1 In the petition, petitioners state that they cannot recall
whether the period for assessment and collection of taxes for
1992 had been validly extended to include the date of
respondent’s notice of a deficiency for 1992. If not,
petitioners raise an affirmative defense based on the expiration
of the period for assessment and collection of the tax for 1992.
See sec. 6501(a). The parties have since stipulated that the
notice of deficiency for 1992 was timely. Therefore, we assume
that petitioners are not pursuing their affirmative defense, and
we do not further consider it.
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