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Year Deficiency Penalty
1991 $4,599 $920
1992 5,879 1,176
1993 5,641 1,128
At the time the petition was filed, petitioner resided in
Greensboro, North Carolina. The deficiencies result from the
inclusion in income of funds embezzled by petitioner's wife,
Linda, in the respective amounts of $17,450 in 1991, $25,997 in
1992, and $28,379 in 1993, and the disallowance of losses in the
respective amounts of $3,345 in 1991, $3,213 in 1992, and $2,055
in 1993 claimed on the returns from a bookkeeping business
operated by Linda.
The sole issue is whether petitioner is entitled to relief
as a so-called innocent spouse pursuant to section 6013(e)(1).
The facts may be summarized as follows. Petitioner and
Linda married in 1988. They had a child in 1992. Petitioner had
worked as a "general superintendent" for several construction
companies. Petitioner dropped out of college in 1979 but went
back in the fall of 1991 as a full time student majoring in civil
engineering with a stipend that included tuition and books.
Linda worked full-time as a bookkeeper/accountant for Datanet
Services, Inc. (Datanet), and essentially supported the family.
Linda was approximately 28 years old during 1991. Petitioner was
apparently a few years older.
From the beginning, petitioner and Linda had financial
difficulties. In 1988, they sought protection under chapter 13
of the Bankruptcy Code. The bankruptcy plan required them to pay
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