- 3 - that time, petitioners were husband and wife and resided in Dallas, Texas. Respondent filed an answer to the petition on June 26, 1986. The primary issue involved deductions claimed for losses on transactions between petitioner Thomas L. Freytag (Mr. Freytag) and First Western Government Securities, Inc. (First Western). At that time there were more than 3,000 cases involving the same issues. Test cases had been selected, and this case was held in abeyance. The First Western issues were resolved in Freytag v. Commissioner, 89 T.C. 849 (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. on other grounds 501 U.S. 868 (1991). On January 5, 1990, petitioners filed a petition in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division. Respondent filed a proof of claim that was amended several times to include, inter alia, the income taxes and additions to tax for the years at issue in this case. Respondent notified the Court of the bankruptcy proceedings, and pursuant to 11 U.S.C. sec. 362(a)(8) (1994) (Bankruptcy Code), this Court, on May 2, 1991, stayed all proceedings in this case. In the bankruptcy court, Mrs. Freytag objected to respondent's amended proofs of claim. She did not contest the underlying deficiencies for 1981 and 1982, and the parties stipulated that the challenged deductions for 1981 and 1982 were in fact grossly erroneous and had no basis in fact or law. See Freytag v. Commissioner, supra. Rather, she sought aPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011