- 3 -3
After concessions,1 the following issues remain for decision:
(1) Whether Maurice D. Taylor (petitioner) received $280,698 (or
any lesser amount) of income from a check-kiting scheme in 1988;2
(2) whether petitioner is liable for the fraud addition to tax
pursuant to section 6653(b)(1) for 1988 and fraud penalties
pursuant to section 6663 for 1989 and 1990; (3) whether Elinor
Taylor (Mrs. Taylor) is entitled to innocent spouse relief pursuant
to section 6013(e) for each year in issue; and (4) in the event the
Court does not sustain respondent's determinations of the fraud
addition to tax or penalties, whether petitioners are liable for
additions to tax or accuracy-related penalties for negligence,
substantial understatement, and failure to file.
All section references are to the Internal Revenue Code as in
effect for the years in issue, unless otherwise indicated. All
1 The parties stipulate that petitioners had net income
from the grocery/convenience store business of $72,919 in 1988,
$102,370 in 1989, and $87,877 in 1990. Respondent concedes that
petitioners had no net income from the jewelry business and that
Mrs. Taylor is not liable for the fraud additions to tax and
penalties. Petitioners concede respondent's determinations with
respect to the individual retirement account distribution,
interest income, and gambling winnings. Petitioners further
concede that the net income from the grocery/convenience store
business is subject to self-employment taxes for each year in
issue. Finally, petitioners concede that they are liable for the
additions to tax for failure to timely file their 1989 and 1990
Federal income tax returns pursuant to sec. 6651(a)(1).
2 In the notice of deficiency, respondent determined
unreported income of $300,698 from a check-kiting scheme in 1988.
At trial, respondent conceded that $20,000 of the $300,698
related to attorney's fees and thus reduced the amount of
unreported income from the check-kiting scheme to $280,698.
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