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income tax return (2000 amended return) together with an attached
Form 8275, Disclosure Statement.5
The 2000 original return was amended to reflect petitioner’s
assertion that the section 83(b) election, for the nonvested
stock granted under option No. 117, was invalid. Petitioner
contended no AMTI was realized (the spread between FMV and the
exercise price on the date of exercise) in 2000 from the exercise
of the option for nonvested shares. The AMTI reported on the
2000 amended return reflected only the spread between the FMV and
exercise price of vested stock on the date of exercise and the
remaining shares that vested each subsequent month until the end
of the 2000 tax year. As a result, the 2000 amended return
substantially reduced AMT by $915,597 for a total AMT of $16,712,
and reported a regular tax of $166,872, with a tax owing of
$47,733, after deducting a foreign tax credit of $22 and total
payments of $135,791. The 2000 amended return prepared by Mr.
Isaacson was not accepted by the IRS.
5 Each return and amended return Mr. Isaacson prepared
included a Form 8275, Disclosure Statement, which contained Mr.
Isaacson’s tax opinion letter to petitioner. To avoid certain
penalties, Form 8275 is used by taxpayers to disclose items or
positions that are not otherwise adequately disclosed on a tax
return. The form is filed to avoid an accuracy-related penalty
due to disregard of rules or regulations or due to a substantial
understatement of income tax for non-tax-shelter items if the
return position has a reasonable basis.
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Last modified: May 25, 2011