John D. Shea - Page 1

                                   112 T.C. No. 14                                    

                               UNITED STATES TAX COURT                                

                             JOHN D. SHEA, Petitioner v.                              
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket Nos. 10841-95, 23549-96.      Filed April 1, 1999.              

                    P and his wife filed joint returns for 1990 and                   
               1991.  P submitted a delinquent return for 1992 that                   
               was filed as a joint return.  R determined that P                      
               underreported business receipts for 1990, 1991, and                    
               1992 based on deposits to P's bank accounts and also                   
               disallowed business deductions claimed on P's returns.                 
               In the notice of deficiency for 1992, R determined that                
               P's proper filing status for 1992 was married filing                   
                    Even though P and his wife remained married                       
               throughout 1992, R did not allocate one-half of P's                    
               income for 1992 to P's wife pursuant to California                     
               community property law.  Sec. 66(b), I.R.C., authorizes                
               R to disallow the benefits of any community property                   
               law to P if P acted as if he were solely entitled to                   
               the income in question and failed to notify his wife of                
               the nature and amount of such income.  On brief, R                     
               relies exclusively on sec. 66(b), I.R.C., as                           
               justification for denying the benefits of community                    
               property law to P.  However, R's notice of deficiency                  
               contained no reference to sec. 66(b), I.R.C., nor did                  
               it refer to any facts that would support a sec. 66(b),                 

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