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Discussion
A. Estate of Spear v. Commissioner, T.C. Memo. 1993-213
Jeanette and Leon Spear filed joint Federal income tax
returns for 1975, 1976, and 1977. Respondent determined that
petitioners are liable for deficiencies in income tax and
additions to tax for fraud as follows:
Additions to Tax
Year Deficiency Sec. 6653(b)
1975 $51,271.70 $25,635.85
1976 157,706.46 78,853.23
1977 93,536.23 46,768.12
Using the net worth plus expenditures method, respondent
determined that petitioners had unreported income in 1975, 1976,
and 1977.
Petitioner did not comply with an order of this Court to
testify at trial. As a result, we sanctioned petitioners by
deeming that respondent made a prima facie showing of certain
facts alleged by respondent in paragraph 7 of the amended answer
(the deemed facts). Estate of Spear v. Commissioner, T.C. Memo.
1993-213. We upheld most of respondent's deficiency
determinations and held that petitioners were liable for the
additions to tax for fraud.
B. Estate of Spear v. Commissioner, 41 F.3d 103 (3d Cir. 1994)
Petitioners appealed our decision in docket No. 3276-87.
The Court of Appeals vacated our decision and remanded the case
with instructions that we decide it without treating respondent
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