- 5 -
documents were delivered to respondent's counsel on November 14, 1994,
approximately 3 weeks before the call of the calendar upon which this
case was listed for trial. Official IRS transcripts of petitioners'
accounts do not reflect that the returns were ever formally filed.
Petitioners' 1989 tax year was the subject of a previous case in
this Court; namely, King v. Commissioner, T.C. Memo. 1994-318. For
that year petitioners filed a joint Federal income tax return. Since
petitioners had filed no returns for 1990 and 1991 at the time
respondent's agent began the audit of petitioners' tax affairs for
those years, and failed to provide records on the basis of which
petitioners' correct liability could be determined, the revenue agent
reconstructed petitioners' income for 1990 and 1991 by reference to
information provided by third parties (IRP) and by application of the
consumer price index (CPI) to amounts reported on petitioners' 1989
return.
Since Doyle and Yvonne filed no returns, respondent issued
separate notices of deficiency to them for the years in issue.
Petitioners' 1989 joint return contained three separate Schedules C,
two for Doyle and one for Yvonne. Since California is community
property state, respondent took a protective position in the notices
of deficiency, attributing to each petitioner 100 percent of such
petitioner's income, and also attributing to each petitioner 50
percent of the other petitioner's Schedule C income. Since respondent
now concedes that petitioners' 1990 and 1991 income tax liability may
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011