Astrida Terauds - Page 16

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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               

               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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