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Petitioners did not report in 1988 the $40,950 received in
advances from Robert Randall Co. As previously discussed, the
$40,950 constitutes compensation, which is includable in
petitioner's gross income.
Section 6501(e) provides: "If the taxpayer omits from gross
income an amount properly includable therein which is in excess of
25 percent of the amount of gross income stated in the return, the
tax may be assessed, or a proceeding in court for the collection of
such tax may be begun without assessment, at any time within 6
years after the return was filed." Further, section 6503(a)
provides for the suspension of the running of the period of
limitations if a proceeding is placed on the docket of this Court,
from the issuance of the deficiency notice until a decision of the
Court becomes final.
In the instant case, petitioners filed their 1988 return on
April 15, 1989. The notice of deficiency for 1988 was issued on
May 27, 1994. The petition requesting a redetermination of
respondent's deficiency determination for 1988 was filed on August
30, 1994. Sec. 6503.
The $40,950 which petitioners failed to include in their 1988
income is in excess of 25 percent of the amount of gross income
stated on the return.3 Thus, on the date respondent's notice of
3 Even if the sale of petitioners' home is taken into
account, for sec. 6501(e) purposes, the $14,050 capital gain on
the sale, not the $180,000 gross sales price, is used in
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