John J. Maloney and Mary Frances Maloney - Page 1

                                        T.C. Memo. 1998-209                                             

                                     UNITED STATES TAX COURT                                            

                 JOHN J. MALONEY and MARY FRANCES MALONEY, Petitioners v.                               
                         COMMISSIONER OF INTERNAL REVENUE, Respondent                                   

                  Docket No. 4421-96.               Filed June 16, 1998.                                

                  Gregory R. Noonan, for petitioners.                                                   
                  George D. Curran, for respondent.                                                     

                            MEMORANDUM FINDINGS OF FACT AND OPINION                                     

                  FOLEY, Judge:  In a notice of deficiency issued on January                            
            22, 1996, respondent determined deficiencies, additions to tax,                             
            and civil fraud penalties relating to John and Mary Maloney's                               
            1984 and 1986 Federal income taxes.  The parties have settled all                           
            issues relating to the 1984 tax year.  Among the issues relating                            

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