- 8 - In the notices of deficiency, respondent determined that petitioners had ordinary income from the gas rebate payments in the amounts that they actually received rather than in the amounts reported on the corrected Schedules K-1. Discussion Petitioners do not dispute that they received ordinary income from the West Florida Gas rebates, but they disagree with respondent’s determination as to the manner in which the income should be allocated between Briggs and the Morrises. On brief, petitioners state that the issue is “whether the gas rebates should go through Towers Construction and pass through to the petitioners equally or be divided according to whom the checks were made out.” Petitioners contend that the gas rebates were earned by Towers Construction and should pass through to Briggs and Mrs. Morris equally, each being a 50-percent shareholder.7 Respondent replies first, in essence, that if petitioners wanted the gas rebate payments allocated in this manner, they should have done so when they first filed their returns, and second, that respondent’s allocation “accurately reflects how petitioners in fact treated the payments.” 7 Petitioners’ position has the effect of producing equal and opposite adjustments to the Morrises’ and Briggs’ redetermined taxable incomes.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