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Thomas M. Fries and Christine A. Fries, pro sese.
Amy A. Campbell, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
NIMS, Judge: Respondent determined a deficiency in
petitioners' Federal income tax for the tax year ended December
31, 1989, in the amount of $19,728. Respondent also determined
that petitioners are liable for an accuracy-related penalty of
$3,946 pursuant to section 6662(a) for 1989. (Petitioner
Christine A. Fries is a party to this proceeding solely because
she filed a joint return with her husband, and the term
petitioner will be used henceforth to refer to Thomas M. Fries.)
All section references are to sections of the Internal
Revenue Code in effect for the year in issue. All Rule
references are to the Tax Court Rules of Practice and Procedure.
The issues for decision are as follows:
(1) Whether petitioners are entitled to a claimed bad debt
deduction of $75,000 for 1989. We hold that they are not.
(2) Whether petitioners are liable for the accuracy-related
penalty under section 6662(a) for a substantial understatement of
tax. We hold that they are.
Some of the facts have been stipulated and are found
accordingly. The stipulation of facts and attached exhibits are
incorporated herein by this reference. Petitioners resided in
Dunwoody, Georgia, when they filed their petition.
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