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the community income from Sharer Accountancy and all other issues
related thereto. Neither petitioner nor her attorney responded
to this letter, nor were any additional documents submitted to
respondent. However, because of the pending case involving
petitioner's 1986 and 1987 tax years, the parties agreed to
continue generally the trial of this case.
On September 8, 1994, the opinion in petitioner's 1986 and
1987 case was rendered. See Sharer v. Commissioner, T.C. Memo.
1994-453. This Court found that petitioner and Mr. Sharer were
living separate and apart during 1986 and 1987, and that the net
income from Sharer Accountancy was Mr. Sharer's separate income
and was not community income. The Court also found that
petitioner had to include in income a portion of the amounts paid
to her as "spousal wages". The Court found that the remainder of
the payments represented repayment of loans made by petitioner to
Mr. Sharer, and such payments were not income.
On October 20, 1994,4 the same Appeals Officer contacted
petitioner's attorney again to see if the 1988 tax year could be
settled in light of the Court's opinion for the 1986 and 1987 tax
years. By letter dated November 2, 1994, petitioner's attorney
4
From this point on, it appears from the record of both cases
that all correspondence and communications between the parties
dealt with both years 1988 and 1989. The issues considered by
the parties in subsequent correspondence related to either year
or both years. As discussed later in this opinion, the petition
challenging respondent's determinations for the 1989 tax year was
filed on June 24, 1993.
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