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Additions to Tax
Sec. Sec. Sec.
Deficiency 6653(b)(1) 6653(b)(2) 6661
$49,846 $24,923 * $12,462
* 50 percent of interest due on portion of
underpayment attributable to fraud.
All section references are to the Internal Revenue Code in
effect for 1983, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
Petitioners assert that offshore trusts that they
established in 1982 constituted sham trusts that lacked economic
substance and that should be disregarded for Federal income tax
purposes. Petitioners and respondent, however, disagree on the
year in which funds relating to such trusts should be taxable to
petitioners.
The issues for decision are: (1) Whether the funds in
question should be treated as taxable to petitioners under the
constructive receipt doctrine in 1982 -- a year not before the
Court -- or as taxable to petitioners in 1983 -- the year in
which petitioners actually received and used the funds; and
(2) whether petitioners filed a fraudulent 1983 joint Federal
income tax return, but for which the period of limitations on
assessment against petitioners for 1983 is barred.
FINDINGS OF FACT
Many of the facts have been stipulated and are so found.
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Last modified: May 25, 2011