Dennis C. Gandy - Page 38

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          Respondent adjusted the amounts of the deficiencies in income               
          tax, the additions to tax, and the penalty accordingly.                     
               On September 4, 1992, petitioners pleaded guilty and were              
          convicted of subscribing to a false return for 1987, in violation           
          of section 7206(1).                                                         
               Petitioners do not deny that they had unreported gross                 
          receipts from the nursery during the years in issue.  They also             
          had unreported interest income during certain of those years.               
          For 1986, they do not dispute that the omitted income exceeded              
          25 percent of the gross income stated in their return; thus, for            
          that year, the period of limitations is 6 years, under section              
          6501(e)(1)(A), and assessment is not barred.                                
               Mr. Gandy’s return for 1989 was delivered to the IRS on                
          September 24, 1990.  Petitioners claim that the return was                  
          untimely filed; that pursuant to section 7502(a)(1), the return             
          was filed when postmarked on September 20, 1990; and, therefore,            
          the notice of deficiency for that year, mailed on September 21,             
          1993, was untimely.  Section 7502(a)(1) only applies, however, if           
          the postmark date falls within the prescribed period or on or               
          before the prescribed date for the filing (including any                    
          extension granted for such filing) of the return.  Sec.                     
          7502(a)(2).  There is no evidence of an extension of time to                
          file.  Without an extension from April 15, 1990, up to or beyond            

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