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and petitioners’ 1982 and 1983 joint Federal income tax returns
reflected that petitioners owed no Federal income tax.
On audit for 1982 and 1983, respondent determined that
petitioners, on their 1982 and 1983 joint Federal income tax
returns, fraudulently understated their income from their
apartment rental business, and respondent determined for those
years the fraud additions to tax and the substantial
understatement addition to tax.
Respondent's notice of deficiency for petitioners’ tax years
1982 and 1983 was mailed to petitioners on December 15, 1993.
Respondent's separate notices of deficiency to petitioners for
1984 were also mailed on December 15, 1993.
Petitioner Janet Wade did not file a petition as to the
notice of deficiency she received for 1984.
During respondent's audit, on April 23, 1993, petitioners
submitted to respondent a copy of a Form 1040 (U.S. Individual
Income Tax Return) that purported to be a copy of petitioners’
1984 joint Federal income tax return that was allegedly filed by
petitioner in 1988 and that reflected a tax due of $386.
At the time of trial, respondent's computer records
indicated that neither petitioner had filed a Federal income tax
return for 1984 and that neither petitioner had paid any income
tax for 1984. Respondent did not accept or treat the above Form
1040 as "filed" by petitioners in 1993 because the document
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