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1490 (9th Cir. 1990), revg. 91 T.C. 160 (1988); Herbert v. United
States, 850 F.2d 32, 34 (2d Cir. 1988).1
Petitioner points out that he paid his former spouse $6,800 from
the cash that he retained. Petitioner testified vaguely that he gave
his former spouse more than $6,800. However, petitioner’s testimony
does not give us a sufficient basis to reduce his taxable income. A
taxpayer may not avoid income by assigning it to another. Lucas v.
Earl, 281 U.S. 111 (1930). Petitioner did not show that the $6,800
was an expense of Elan. Thus, the fact that he transferred $6,800 to
her does not reduce his taxable income by that amount. Id.; Ianniello
v. Commissioner, 98 T.C. 165, 173 (1992).
3. Conclusion
We conclude that all of the $120,059 is gross income to
petitioner because he owned 100 percent of Elan and received that
amount as an accession to wealth.
C. Whether Petitioner Is Liable for the Addition To Tax for Failing
To Timely File His Return Under Section 6651(a)
Petitioner did not file a Federal income tax return for 1990.
Section 6651(a)(1) provides for an addition to tax for failure to file
a Federal income tax return unless the taxpayer shows that the failure
was due to reasonable cause and not willful neglect. The burden of
proof is on the taxpayer to show that the failure is due to reasonable
1In light of our conclusion, we need not decide whether Elan
was an S or a C corporation and whether the $120,059 was a
distribution in respect of stock.
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