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Mr. Vega routinely asked Mrs. Vega to sign documents without
explaining their content or legal effect. He assured her that
signing the documents was in the family's best interest. He
frequently told her that her role was to take care of the house
and children and that she could leave if she did not like this
arrangement. Invariably, she would sign the documents.
The Vegas' 1988 individual income tax return reported total
Schedule C (Profit or Loss From Business or Profession) income of
$2,000, total Schedule C deductions of $64,725, and total
Schedule E (Supplemental Income Schedule) income of $84,993.
The Vegas' 1989 individual income tax return reported total
Schedule C income of $5,000, total Schedule C deductions of
$26,421, and no self-employment tax.
On May 24, 1994, respondent issued a notice of deficiency to
Mrs. Vega and Mr. Vega's estate for the 1988 and 1989 tax years.
With respect to the 1988 tax return, respondent disallowed the
deductions totaling $64,725 due to lack of substantiation and
increased total Schedule E income by $1,952. These adjustments
resulted in a deficiency in the amount of $16,550 for 1988. With
respect to the 1989 tax return, respondent disallowed the
deductions totaling $26,421 due to lack of substantiation. This
adjustment resulted in a deficiency of $6,701.
On June 21, 1994, Mrs. Vega filed her petition with this
Court requesting relief under section 6013(e).
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Last modified: May 25, 2011