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The background on this issue is somewhat unusual.
Petitioner and her daughter Sandra held joint title to the
corporate stock addressed earlier in this opinion in connection
with the capital gain issue. Petitioner and Sandra also held
joint title to several interest-bearing accounts in several banks
as well as certificates of deposit. For each of these accounts
and securities, the reports to the Internal Revenue Service (IRS)
by the payers of interest and dividends, as well as the reports
of the gross sales proceeds on the sales of corporate stocks
during 1986, listed Sandra as the recipient or payee of the
reported amounts. However, for the years 1985, 1986, and 1987,
Sandra did not report any of these amounts on her Federal income
tax returns. Notices of deficiency were issued to Sandra for
these 3 years with respect to the unreported amounts. Sandra did
not pay the deficiencies determined in the notices of deficiency
and took no action to challenge the determinations of respondent
in these notices of deficiency. Accordingly, Sandra was assessed
for deficiencies in tax in accordance with the amounts determined
in the notices of deficiency.8 Pursuant to these assessments,
the IRS levied on several of the bank accounts that were in the
joint names of Sandra and petitioner. Sizeable amounts of money
8
The notices of deficiency to Sandra and the assessments
against her were not introduced into evidence. These factual
assertions are based solely on statements to the Court by counsel
for respondent, which the Court construes as factual admissions
for purposes of this case.
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