Lindsey C. Nelson - Page 2

                                                - 2 -                                                  
                        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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