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Mr. Heitzman and petitioner each signed separate Forms 872C,
“Consent to Extend Time to Assess Tax”, extending the period of
limitations for taxable year 1979 until June 30, 1984.
In May 1983, Mr. Heitzman traveled to Nowata County,
Oklahoma, to investigate the Stonehurst lease. Mr. Heitzman
found several abandoned wells and associated piping and machinery
at the sites of the leaseholds. The surrounding area was also
littered with abandoned oil wells.
Petitioner reported $2,374 in adjusted gross income for
1983. Petitioner may have had up to $4,461 in additional
adjusted gross income for 1983, although that additional income
may have been reported in other taxable years.9
In June 1984, Mr. Heitzman filed for bankruptcy after the
failures of his businesses, DMA Heitzman and Autocast. These
failures were precipitated by the death of Mr. Heitzman’s partner
9 For taxable year 1983, petitioner reported $2,374 in
adjusted gross income. Petitioner received an additional $2,250
in support payments during 1983 that were not reported on her
1983 tax return. She also received a check for $1,000, written
on Dec. 27, 1982, for the January 1982 support payment. The
record does not reflect whether that check was reported on
petitioner’s 1982 return.
Petitioner also received a check for $16,000, dated Dec. 27,
1983, as the final installment payment from the sale of the
house, of which 18.92 percent was taxable income, or $3,027.
Using the Schedule D attached to petitioner’s 1983 tax return, 40
percent of that amount, or $1,211, would have been reported as
gross income on petitioner’s Form 1040 in 1983 if it was to be
included in her 1983 gross income. The record does not reflect
whether that amount was reported on petitioner’s 1984 return.
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