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6013(d)(3). Both allowable deductions and taxable income are
determined on an aggregate basis. See sec. 1.6013-4(b), Income
Tax Regs. Where a joint income tax return is filed, “it is
treated as the return of a taxable unit and the net income
disclosed by the return is subject to [tax] * * * as though the
return were that of a single individual.” Helvering v. Janney,
311 U.S. 189, 192 (1940) (quoting Sol. Op. 90 (1921), 4 C.B.
236). The amounts “paid” by Mowrey to Boehm have not left
petitioners’ taxable unit, and accordingly no deduction is
allowable.
Mowrey testified that petitioners had “a prenuptial
agreement that says that all of our income would be sole and
separate.” Using this testimony as their springboard,
petitioners argue on brief that respondent’s sham theory is
therefore inapplicable. Petitioners have introduced no
prenuptial agreement into evidence. Whether or not there is a
prenuptial agreement, however, is immaterial. Having filed a
joint income tax return, petitioners must aggregate their income,
prenuptial agreement or no.
We sustain respondent's determination on this issue.
Section 6662 Penalty
Section 6662(a) imposes a penalty equal to 20 percent of the
portion of an underpayment of taxes attributable to negligence or
disregard of rules or regulations. Negligence includes any
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