William J. Fleischaker and Donni L. Fleischaker - Page 32

                                        - 32 -                                         
          reduced penalty for understatement of tax.  See Accardo v.                   
          Commissioner, 942 F.2d 444, 453 (7th Cir. 1991), affg. 94 T.C. 96            
          (1990) (taxpayer's statement that his deduction of $207,000 was              
          for "Legal fees re conservation of property held for production              
          of income" falls short of the exposition of relevant facts                   
          required under section 6661(b)(2)(B)(ii)); Schirmer v.                       
          Commissioner, supra at 285-286 (mere listing of income, expenses             
          and claimed depreciation did not constitute disclosure of                    
          relevant facts); see also Zdun v. Commissioner, T.C. Memo. 1998-             
          296 (“Reporting income actually earned as a dentist as income                
          earned from an apple orchard is misrepresentation, not                       
          disclosure."); Lester v. Commissioner, T.C. Memo. 1995-317                   
          (Taxpayers' use of the term "Financial Trading" in the title                 
          portion of their Schedule C was not sufficient to frame the                  
          controversy or to adequately disclose their position.); Myers v.             
          Commissioner, T.C. Memo. 1994-529 (Even if "COMMODITIES" was                 
          adequate disclosure for deductions on Schedule C, the commodity              
          contract losses were deducted on Schedule F, which is completely             
          unrelated to petitioners' "disclosure" on Schedule C.)                       
               Petitioners did not attach any disclosure statement to their            
          return, and they did not provide sufficient information for                  
          respondent to identify the potential controversy on their return.            
          To the extent the Rule 155 computation indicates a substantial               
          understatement of petitioners' income tax within the meaning of              

Page:  Previous  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  Next

Last modified: May 25, 2011