Alejandrina De Aycardi - Page 3

                                        - 3 -                                         
               Petitioner did not file a Form W-8, Certificate of Foreign             
          Status, that is normally required in order to qualify interest              
          received by a nonresident of the United States for nontaxable               
          treatment under section 871(h).                                             
               During 1988 and 1989, petitioner received $8,414 and                   
          $106,682, respectively, in dividend income with regard to the               
          above $1,015,489 mutual fund investment.  Because petitioner had            
          provided her Social Security number to the mutual fund and                  
          because petitioner had not provided a Form W-8 to the mutual                
          fund, the mutual fund treated petitioner as a U.S. resident and             
          filed with respondent Forms 1099-INT and DIV reflecting the                 
          interest and dividend income paid to petitioner in 1988 and 1989.           
               For 1988 and 1989, petitioner did not file Federal income              
          tax returns.  For 1988 and 1989, respondent prepared                        
          substitute income tax returns on petitioner's behalf using                  
          information set forth in the Forms 1099-INT and DIV that were               
          filed with respondent by the mutual fund.                                   
               On the substitute income tax returns, respondent treated               
          petitioner as a U.S. resident and calculated the tax owed by                
          petitioner based on tax rates applicable to U.S. residents.                 
          Respondent treated the interest and dividend income that                    
          petitioner received in 1988 and 1989 as taxable, and respondent             
          used the standard 20-percent backup withholding rate in                     
          calculating petitioner's tax liability for each year.  On brief,            
          respondent concedes that the interest income that petitioner                

Page:  Previous  1  2  3  4  5  6  7  8  Next

Last modified: May 25, 2011