-3-
dividends of $314,504, $27,298, and $116,163 in 1989, 1990, and
1991, respectively, from INI. We hold petitioner received
distributions from INI the character and amounts of which are set
out below. (5) Whether petitioners realized a $28,248 loss from
a nonbusiness bad debt in 1991. We hold they did not. (6)
Whether petitioners are liable for an accuracy-related penalty
pursuant to section 6662 for 1989, 1990, and 1991. We hold they
are. (7) Whether Mrs. Jones qualifies as an innocent spouse
under section 6013(e) for 1989, 1990, and 1991. We hold she does
not.2
Some of the facts have been stipulated and are so found.
The stipulated facts and the accompanying exhibits are
incorporated into our findings by this reference. At the time
the petition in this case was filed, petitioners resided in
Atlanta, Georgia.
2 Respondent determined that for the years at issue certain
computational adjustments should be made, which would: (1)
Preclude petitioners from taking a deduction for medical and
dental expenses, (2) reduce petitioners' itemized deductions, (3)
disallow petitioners' deduction for exemptions, and (4) preclude
petitioners from claiming the Earned Income Credit. These are
mathematical adjustments that the parties can make in their Rule
155 computation.
In addition, in the notice of deficiency respondent
disallowed petitioners' claimed loss of $5,700 from the sale by
Development of certain business property and determined that
petitioners had a gain of $8,921 from that sale. Respondent's
determination is presumed correct, and petitioners bear the
burden of proving otherwise. Rule 142(a); Welch v. Helvering,
290 U.S. 111 (1933). Petitioners did not address this issue at
trial or on brief; thus, petitioners have failed to meet their
burden of proof. Accordingly, respondent is sustained on this
issue.
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