- 2 -
W's 1982 joint tax return.) R abated $55,923 of H's and W's
1980 tax liability, which (with interest, etc.) resulted in
W’s receiving a refund check totalling $128,715.36 in 1988.
1. Held: The 1981 grossly erroneous item (the
$1,600,000 deduction) is an item of H. Sec. 6013(e)(1)(B),
I.R.C. 1954.
2. Held, further, when the tax return was signed, W
did not know, and had no reason to know, that there was a
substantial understatement of tax for 1981. Sec.
6013(e)(1)(C), I.R.C. 1954.
3. Held, further, in 1988 W received a substantial
benefit from the 1981 grossly erroneous item (the $54,372.61
that had been transferred from the 1981 account to the 1980
account), and so it is not inequitable to hold W liable for
the substantial understatement of 1981 tax resulting from
that grossly erroneous item. Sec. 6013(e)(1)(D), I.R.C.
1954.
Gary S. Weinick, for petitioners.
Halvor N. Adams III, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
CHABOT, Judge: Respondent determined deficiencies in
Federal individual income tax and additions to tax under sections
66591 (valuation overstatements) and section 6661 (substantial
understatement of liability) against petitioners as follows:
Additions to Tax
Sec. Sec.
Year Deficiency 6659 6661
1 Unless indicated otherwise all section references are to
sections of the Internal Revenue Code of 1954 as in effect for
1981.
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