Arthur C. Brincat - Page 6




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          time of his tax return preparation, inquired of his return                   
          preparer about whether an inheritance from his father was                    
          taxable.  Edgar was not knowledgeable about the legal proceedings            
          brought by the State.  He believed that because he had already               
          received the money from his father’s trust, it was his                       
          inheritance.  The return preparer, a certified public accountant             
          who specialized in taxation and who had prepared Edgar’s returns             
          since 1969, after hearing the facts of which Edgar was aware,                
          advised that it was not taxable.                                             
               On Edgar’s 1989 Federal income tax return, he reported three            
          items of income as follows:  $3,122 interest, $1,419 gross                   
          business receipts, and $7,405 as a nontaxable pension.  Edgar’s              
          1989 Federal income tax return was timely filed on October 15,               
          1990, pursuant to extensions to file granted by respondent.  On              
          September 5 and 6, 1996, the Internal Revenue Service and Edgar              
          signed an agreement consenting to extension of the period for                
          assessment of his 1989 tax year to December 31, 1997.  On May 20             
          and 29, 1997, a similar consent was executed to extend the period            
          to December 31, 1998.  The notice of deficiency for the 1989 tax             
          year was mailed to Edgar on August 27, 1998.                                 
               A 1989 return was not filed for Victor, the trust, or Magna             
          Carta.  Victor’s estate was not probated, and an estate tax                  
          return was not filed for Victor’s estate.  Magna Carta paid an               








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