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limitations does not bar assessment and collection of
tax for 1983 and 1985.
Leonard Bailin, for petitioners.
Drita Tonuzi and Daniel Rosen, for respondent.
MEMORANDUM OPINION
HALPERN, Judge: By notice of deficiency dated May 22, 1997,
respondent determined deficiencies in, and additions to,
petitioners' Federal income tax as follows:
Additions to Tax*
Year Deficiency Sec. 6653(b)(1) Sec. 6653(b)(2) Sec. 6661
1983 $626,647 $313,324 ** $156,662
1985 25,003 77,268 ** 6,251
* Respondent did not determine any additions to tax with
respect to Marie Biaggi under sec. 6653 (b)(1) and (2).
** 50% of the interest due on total deficiency.
Unless otherwise noted, all section references are to the
Internal Revenue Code of 1954 in effect for the years in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
I. Introduction
Respondent’s determination of a deficiency for 1983 results
from his adjustment increasing petitioners’ gross income for 1983
by $1,260,000 on account of the receipt by petitioner Mario
Biaggi (petitioner) during that year of 112,500 shares of stock
of Wedtech Corp., a New York corporation (the Wedtech shares and
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