- 4 -
terest due
on $305,762
est due on
$69,635
The notice of deficiency includes an explanation of the adjustments
which states in pertinent part:
1(A) It is determined that you received unreported income in the
amounts of $1,311,670.00, $252,800.00 and $266,400.00, which was
not reported on your income tax return for the years 1985, 1986,
and 1987, respectively. Therefore, your taxable income is
increased in the amounts of $1,311,670.00, $252,800.00 and
$266,400.00 for the tax years ended December 31, 1985, December
31, 1986, and December 31, 1987, respectively.
1(B) It is determined that you are allowed the cost of sale of
drugs in the amounts of $689,410.00, $159,525.00 and $65,490.00
for the years 1985, 1986, and 1987, respectively. Therefore, your
taxable income is decreased in the amounts of $689,410.00,
$159,525.00 and $65,490.00 for the tax years ended December 31,
1985, December 31, 1986, and December 31, 1987, respectively.
1(C) It is determined that you are allowed a net operating loss
carryback in the amount of $0.00 rather than $122,352.00 and
$180,687.00 as reported on your tax return for the years 1985 and
1986, respectively. Therefore, your taxable income is increased
in the amounts of $122,352.00 and $180,687.00 for the tax years
ended December 31, 1985 and December 31, 1986, respectively.
The notice of deficiency states that the 1987 year is included
in the notice for information purposes only.
Petitioners invoked the Court's jurisdiction by filing a
timely imperfect petition for redetermination, followed by an
amended petition.4
Petitioner now moves for summary judgment with respect to
the following issues: (1) The addition to tax for substantial
4 At the time that the petition was filed, petitioner was
incarcerated in Estill, South Carolina.
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