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settled in 1988, when the FDIC accepted a $350,000 payment in
complete satisfaction of petitioners' liability. Only at the
time of that settlement was the amount of petitioners' liability
on the Bank loan finally established.
For the above reasons, we conclude that petitioners'
liability on the promissory note to Moncor Bank was sufficiently
indefinite in nature and amount to avoid triggering any discharge
of indebtedness income when the settlement with the FDIC was
reached. Only at the time of the settlement did petitioners'
liability on the Bank loan become fixed and definite and equal to
the $550,537 figure agreed to by petitioners and the FDIC. We
conclude that petitioners are not to be treated as having
realized the discharge of indebtedness income in dispute herein.
Section 6651(a)(1) Addition to Tax
Section 6651(a)(1) imposes an addition to tax for the
failure to timely file a Federal income tax return. If a
taxpayer can show that the failure to timely file is due to
reasonable cause and not to willful neglect, the addition to tax
will not be imposed. Sec. 6651(a)(1). The burden of proving
that their income tax return was timely filed is on petitioners.
Rule 142; Welch v. Helvering, 290 U.S. 111, 115 (1933).
To be effective, requests for automatic extensions to file
Federal income tax returns must be filed on or before the date
prescribed for filing the returns. Raskin v. Commissioner, T.C.
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