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All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure.
The issues for decision are: (1) Whether petitioner had
unreported income in 1980, 1981, and 1982; (2) whether petitioner
is liable for the additions to tax for fraud for 1980, 1981, and
1982; (3) whether petitioner is liable for an addition to tax for
a substantial understatement for 1982; and (4) whether respondent
is barred by the statute of limitations from assessing the
deficiencies and additions to tax for 1980, 1981, and 1982.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts, the supplemental stipulation of facts,
and the attached exhibits are incorporated herein by this
reference. At the time the petition was filed, petitioner
resided in Chicago, Illinois.
Petitioner's Business Interests Prior to May 1978
During the early 1970's, petitioner was a partner in the
Festival Theater Partnership (Festival Partnership), which owned
a three-story building located at 1349 N. Wells Street in
Chicago, Illinois. During that time, petitioner was also a
shareholder in the Festival Theater Corp. (Festival Corp.), which
owned and operated the Bijou Theater (the Bijou), a movie theater
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Last modified: May 25, 2011