Gregory Powell & Araminta D. Morton - Page 2

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               This case is before the Court on respondent's motion to                
          dismiss for lack of jurisdiction, filed pursuant to Rule 53.                
          Respondent contends that dismissal is warranted on the ground               
          that the petition was not filed within the time prescribed by               
          sections 6213(a) and 7502.  In contrast, petitioners contend                
          respondent's motion to dismiss should be denied on the theory               
          that the original notice of deficiency was rescinded and                    
          supplanted with an "amended" notice of deficiency which is the              
          subject of their timely filed petition.                                     
          Background                                                                  
               At the time the petition was filed with the Court,                     
          petitioners resided in Upper Marlboro, Maryland.                            
          On April 28, 1997, respondent mailed a joint notice of                      
          deficiency to petitioners determining a deficiency in their                 
          Federal income tax for 1994 in the amount of $2,392.  Included              
          with the notice of deficiency was a Form 4549 (also known as an             
          examination report) dated March 13, 1997.  The examination report           
          reveals that the deficiency is attributable primarily to the                
          disallowance of Schedule C deductions.                                      
               At the time the notice of deficiency was issued in this                
          case, petitioners were advised that respondent's agent would                
          continue to review materials submitted by petitioners for the               
          purpose of substantiating their claimed deductions.  In this                
          regard, on June 4, 1997, respondent's agent issued a revised                





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