- 2 - At trial, petitioners failed to appear, respondent made an oral motion to dismiss for lack of prosecution the issues upon which petitioners bore the burden of proof, and the Court granted respondent's motion. See Rule 149. Respondent concedes that petitioners are entitled to a $2,000 deduction relating to an Individual Retirement Account contribution. The remaining issue for decision is whether petitioners are liable for a fraud penalty. Background Petitioners, husband and wife, resided in Raritan, New Jersey, at the time their petition was filed. During the year in issue, Mr. Jackson received taxable income of $1,200 from Seton Hall University and $2,599 from Berkeley College of New Jersey, but did not give either school his correct Social Security number. Petitioners failed to report this income on their 1996 Federal income tax return. In their petition, petitioners claimed that respondent had accepted their 1996 return "as filed" and that a refund was due to them. Petitioners included with their petition a purported Internal Revenue Service (IRS) letter supporting this claim. The letter was not written, or sent, by an IRS employee. Discussion Respondent determined that petitioners are liable, pursuant to section 6663, for a fraud penalty. Respondent must establishPage: Previous 1 2 3 Next
Last modified: May 25, 2011