- 2 - Year Deficiency 1987 $39,011 1988 23,059 1989 29,594 The issues remaining for decision are: (1) Is petitioner entitled to innocent spouse relief under section 6013(e)(1)2 with respect to the portion of the deficiency for each of the years 1987, 1988, and 1989 that is attributable to certain income from funds that Mr. Morris embezzled and that were not reported in the joint return that they filed for each such year? We hold that she is. (2) Is petitioner entitled to innocent spouse relief under section 6013(e)(1) with respect to the portion of the deficiency for 1987 that is attributable to deductions for a business bad debt and the legal expenses incurred in attempting to recover that debt that were claimed in the joint return for that year? We hold that she is not. (3) Did petitioner and Mr. Morris underreport by $10,000 1(...continued) a decision in that case, which was based upon an agreement between Mr. Morris and respondent that Mr. Morris is liable for deficiencies in income tax and additions to tax for fraud due in part to the omission of certain income attributable to embezzled funds from the Federal income tax returns (joint returns) that he and petitioner filed for the years at issue. Mr. Morris did not join in the petition filed by petitioner and is not a party in the present case. 2 All section references are to the Internal Revenue Code (Code) in effect for the years at issue. All Rule references are to the Tax Court Rules of Practice and Procedure.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011