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In a notice of deficiency dated August 25, 1989, respondent
determined deficiencies in Vincent and Clotilde Farrell's Federal
income tax for 1980 and 1982 in the respective amounts of $55,242
and $51,236. Respondent also determined that interest on
deficiencies accruing after December 31, 1984, would be
calculated at 120 percent of the statutory rate under section
6621(c). On February 24, 1994, respondent filed an amendment to
answer and asserted reduced deficiencies for taxable years 1980
and 1982 in the respective amounts of $29,590 and $51,043.
Respondent also asserted additions to tax for taxable year 1982
in the amount of $12,127 under section 6659 for valuation
overstatement, in the amount of $2,552 under section 6653(a)(1)
for negligence, and under section 6653(a)(2) in an amount equal
to 50 percent of the interest due on $50,278. Finally,
respondent asserted that for taxable years 1980 and 1982,
deficiency amounts of $14,795 and $50,278, respectively, were
subject to the increased rate of interest under section 6621(c).2
Petitioners Joan Spears and Clotilde Farrell were named in
the respective notices of deficiency and are petitioners herein
because they filed joint Federal income tax returns with their
husbands during the taxable years in issue. For convenience,
generally hereafter in discussing or mentioning petitioners
2 We note that respondent had determined in the statutory
notice of deficiency as well that the provision for increased
interest under sec. 6621(c) applied.
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