T.C. Memo. 1996-452
UNITED STATES TAX COURT
ROBERT D. GROSSMAN, JR., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 20526-90, 14364-91. Filed October 7, 1996.
P, a tax attorney, effectively controlled the daily
operations of a group of closely held corporations (C). The
corporations were owned by P’s wife (W), W’s mother, and W’s
brother. In 1983 through 1986, P and W took personal
vacation trips, which P caused C to pay for. C’s payments
of the personal expenses of P and W were constructive
dividends to W. P and W omitted to report these
constructive dividends on their 1983 through 1986 joint tax
returns. The notices of deficiency for 1983 through 1988
were sent to P and W more than 3 years after P and W filed
their joint tax returns for 1983, 1984, and 1985. R
contends that many of these omissions for 1983 through 1986
were due to P’s fraud. P denies the omissions, denies
fraud, and contends that, if there are deficiencies, then he
is entitled to innocent spouse treatment for 1986.
1. Held: The statute of limitations does not bar the
assessment and collection of tax for 1985, but is a bar as
to 1983 and 1984. Sec. 6501(c)(1), I.R.C. 1954.
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