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taxable income for 1976 and 1977 on the income averaging
schedules of the 1978 and 1979 returns are not correct.
Discussion
As applicable for the years in issue, sections 1301 through
1305 provided for income averaging. In order for a taxpayer's
liability to be computed under the income averaging provisions,
the correct taxable income for the base period years must be
determined. Unser v. Commissioner, 59 T.C. 528 (1973). The tax
years in question are 1980 and 1981. Thus, the question is
whether petitioner has adequately established his correct taxable
income for the years 1976 through 1980.7 In their cross-motions
for partial summary judgment, the parties do not disagree as to
the evidence that is available, and ask the Court to decide if,
based on such evidence (or lack of evidence), petitioner, as a
matter of law, qualifies for income averaging.
The only years of base period income put in question by the
pending motions are 1976 and 1977. Since the 1976 and 1977 tax
returns, or copies thereof, are not available, petitioner has
presented other circumstantial evidence through documents and an
affidavit to establish correct taxable income. Respondent has
7 The base years for 1980 are 1976 through 1979. The base
years for 1981 are 1977 through 1980. Respondent does not
question the base years 1978 and 1979. Petitioner's income for
1980 is a matter in issue in this proceeding because 1980 was one
of the years for which a deficiency was asserted by respondent.
Thus, the fact that petitioner's income for that year has yet to
be adjudicated is not an obstacle to his claim for income
averaging. See Ryza v. Commissioner, T.C. Memo. 1977-64.
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