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the interest and dividends received on the bank accounts and
stock was in fact petitioner's income and was not Sandra's
income. As shown earlier, petitioner conceded these
determinations in this case and challenged only the amount of
capital gain realized on the 1986 stock sales.
Although respondent accepted the fact that all of the gains
and income previously attributed to Sandra were attributable to
petitioner, it does not appear that the IRS abated the
assessments against Sandra. Moreover, respondent never released
any of the moneys realized from the various levies. At trial,
counsel for respondent acknowledged that the amounts levied
continued to be held by the IRS but were held for the account of
petitioner rather than Sandra. Counsel for respondent
acknowledged that, if the Court should decide all issues in this
case in favor of respondent, the amounts held by respondent for
the account of petitioner will far exceed the deficiencies in
tax, additions to tax, and interest.9 Until the deficiencies and
additions to tax in this case become final, respondent agrees
9
Counsel for respondent did not advise the Court as to the
legal basis for the levy of property based on an assessment
against a taxpayer respondent acknowledges does not owe the tax
but retains possession of such property for the account of
another taxpayer (petitioner herein) against whom there is no
assessment. There is no indication in the record that the
assessment against Sandra was abated as authorized under sec.
6404, nor is there any indication in the record that petitioner
instituted an action against the IRS under sec. 7426 for the
return of wrongfully levied property.
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