- 10 - On July 23, 2002, respondent’s revenue agent mailed a letter to petitioner Joyce Pendergraft with respect to an examination of petitioners’ 1999 and 2000 joint individual Federal income tax returns, which letter included a request for certain books, records, and documents relating to petitioners’ three trusts and the sale of petitioners’ residence. On October 21, 2002, petitioners entered into a closing agreement with respondent in which agreement petitioners agreed, in principle, that for 1999 and 2000 the NHUSS Trust, the In God We Trust, and the RJ Pendergraft Trust would be disregarded for Federal income tax purposes, that the reported income and expenses of the three trusts would be collapsed into petitioners’ income and expenses, and that petitioners were liable for the tax deficiencies for 1999 and 2000 that related to the trusts’ income and expenses being charged to petitioners. In the above- referenced October 21, 2002, closing agreement, the parties did not finalize or specify the specific amounts of the income and expenses of the trusts that would be charged to petitioners, nor did the parties specify the amounts of the deficiencies that would be charged to petitioners.4 4 We note that, in the closing agreement petitioners entered into with respondent, petitioners appear to have agreed that they would be liable for penalties relating to the collapse of the income and expenses of the three trusts into petitioners’ income and expenses. However, in the trial stipulation, the parties stipulate that petitioners’ liability for these penalties is still in issue, and the parties have briefed this issue. We (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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