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sign an extension of the limitations period.
On November 4, 1998, on the basis of the IRS's understanding
that there would be no meeting before November 17, 1998, the
audit file was forwarded to the review section because the period
of limitations was running. The notice of deficiency for
petitioner's 1995 tax year was issued on February 2, 1999.
Respondent determined a deficiency of $36,565 in
petitioner's 1995 Federal income tax and a section 6662(a)
penalty of $7,313. The adjustments contained in the notice of
deficiency resulted primarily from respondent's determination
that $104,582 of expenses paid by The Fourth Dreamer were
personal and benefited petitioner and thereby constituted
constructive dividend income to him. The notice stated that
petitioner did not provide any information to substantiate
whether the expenses deducted on the corporate return were
personal or business related and that no books or records for the
corporation were provided. Adjustments were made to petitioner's
personal exemption and itemized and standard deductions.
On April 16, 1999, the District Court ordered petitioner to
provide the information requested in the second summons.
Petitioner finally began to do so on or about April 29, 1999.
Petitioner claimed in his petition to this Court that the
business deductions claimed by The Fourth Dreamer were legitimate
business deductions. He further claimed that he was denied an
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