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The civil fraud penalty will be asserted in full
with respect to the estate of Kevin Lorenz, and at a
reduced rate of 20 percent with respect to petitioner
Elizabeth Lorenz.
Petitioners' counsel then said that he had a question and
asked to go off the record to clarify it with the revenue agent.
When the parties went back on the record, they announced they had
answered petitioners' counsel's question but had still not agreed
to the "starting number" for Comet; i.e., its gross income for
1989. The parties had agreed to certain adjustments, but had not
agreed on whether the amount of gross income to which they should
apply those adjustments was the amount in the revenue agent's
original report or amended report. The following discussion
occurred next:
MS. OSHIRO: * * * There was a [sic] original
revenue agent's report and an amended revenue agent's
report. In the amended revenue agent's report, a
$15,000 concession was made. The question is whether
the statutory notice of deficiency was based upon the
original revenue agent's report or upon the amended
revenue agent's report. If the notice of deficiency
was based upon the original revenue agent's report,
then respondent will then concede the $15,000; if it is
based upon the amended revenue agent's report, then
petitioners agree that that number does not get
conceded again.
MR. HAMMER: That's correct.
Following another recess requested by the parties,
respondent's counsel stated that the parties had reached the
following basis of settlement for 1989:
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