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1 50 percent of the interest computed on $18,246 at the time
of assessment and/or payment of tax.
Unless otherwise indicated, all section references are to the
Internal Revenue Code in effect for the year in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
The issues remaining for decision are: (1) Whether
petitioners failed to report income from thefts on their 1986
return; (2) whether petitioners are liable for the addition to
tax for fraud; and (3) whether petitioners are liable for the
addition to tax for substantial understatement of liability.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference. At the
time their petition was filed, petitioners were husband and wife
and resided in San Dimas, California.
Petitioners were married in November 1983. Petitioner
Laura L. Gordon (Mrs. Gordon) was married to Alexander P.
Sandoval (Sandoval) from 1975 to 1982. Mrs. Gordon received
child support payments in bimonthly amounts of $136 during 1985
and 1986 as a result of her divorce from Sandoval.
Petitioners filed a Form 1040, U.S. Individual Income Tax
Return, for 1986 showing $42,309 as their adjusted gross income.
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