- 19 - than 25-percent omission from gross income of an amount properly includable in gross income. Petitioners also argue that they have adequately disclosed the omitted amount in the corporation's Forms 5500 and 5310 filings. Respondent counters by alleging that the disclosure needs to be in the individual tax return itself, that the disclosure was inadequate, and that petitioners are estopped from arguing against the 6-year statute of limitations. We need not decide the disclosure issue since respondent has failed to meet her initial burden of going forward with the evidence to show that the bar of the 3-year statute of limitations is not applicable. The parties agree as to the amount of gross income reported on petitioners' 1986 individual Federal income tax return. There is no question that petitioners omitted the merged amount from gross income. The merged amount is clearly greater than 25 percent of the gross income amount. Consequently, the only issue is whether respondent has established, by a preponderance of the evidence, that the merged amount is "properly includable" in petitioners' gross income for 1986. Respondent asserts that petitioners are estopped from arguing that the merged amount is not properly includable in their gross income for 1986. We have held that petitioners are not estopped from asserting that the merged amount is not taxable in 1986. Petitioners have made the required prima facie case;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