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Claude P. Brown and Estate of Mary Stroud Brown,
Deceased, Claude P. Brown, Executor
Addition to Tax
Docket No. Year Deficiency Sec. 6653(a)(1)
14270-86 1981 $9,956,314 $4,978,157
Respondent also determined with respect to petitioners I.C.
Hemmings and Sue B. Hemmings that the entire deficiency amounts
for 1978 and 1979 and $1,667,468 of the deficiency for 1980 are
substantial underpayments due to tax-motivated transactions under
section 6621(d) and that the increased rate of interest under
section 6621(b) is applicable.
Petitioner I.C. Hemmings (Mr. Hemmings) and petitioner Sue
B. Hemmings (Mrs. Hemmings) (collectively the Hemmingses),
resided in Florida at the time their petitions were filed in
docket Nos. 41407-85, 14273-86, and 9710-90. Petitioner Claude
P. Brown (Mr. Brown) resided in Florida at the time the petition
was filed in docket No. 14270-86. Pursuant to an Order of this
Court dated February 28, 1996, these cases were consolidated for
purposes of briefing and opinion.
After concessions, the issues are: (1) Whether Mrs.
Hemmings is entitled to relief under the so-called innocent
spouse provisions of section 6013(e) for any of the taxable years
1978, 1979, or 1980; (2) whether Mr. Brown and/or the Hemmingses
made a valid election pursuant to sections 508 and/or 509 of the
Economic Recovery Tax Act of 1981 (ERTA), Pub. L. 97-34, 95 Stat.
172, 333, with respect to their commodity trading activities for
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