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After considering the parties’ concessions and stipulations to be
bound by the outcome of other cases, the issues remaining for our
consideration are: (1) Whether petitioners’ partnership’s 1989
income was understated; (2) whether petitioners correctly
reported their distributive shares of partnership income;
(3) whether either petitioner failed to report income with
respect to various items respondent determined to be includable
in his income; (4) whether either petitioner is liable for
additional self-employment tax; and (5) whether either petitioner
is liable for the fraud penalty under section 6663.1
FINDINGS OF FACT2
Petitioners Bill McDonald (McDonald) and Richard D. Maynard
(Maynard) resided in California at the times each of their
petitions was filed in these cases. McDonald and Maynard each
filed his 1989 income tax return reflecting that his filing
status was “single”. Although McDonald and Maynard were each
married as of the close of 1989, they, along with their
respective spouses, filed for and received annulments of their
marriages during 1994. The question of whether McDonald and
Maynard were married or single for Federal income tax purposes,
considering the annulments of their respective marriages, was
decided by this Court in McDonald v. Commissioner, T.C. Memo.
1 Section references are to the Internal Revenue Code in
effect for the year under consideration. Rule references are to
this Court’s Rules of Practice and Procedure.
2 The parties’ stipulation of facts and exhibits are
incorporated by this reference.
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