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which the assessment is made, either through redemption of the
certificates or eventual sale of the property. See id.
At the public auctions, potential purchasers bid to purchase
tax certificates in terms of the rate of interest payable on the
face amount up to a statutory maximum of 18 percent. The tax
certificates were sold to the party bidding the lowest rate. The
tax certificates have a term of 7 years and cannot be collected
after the expiration of that term.
When a tax certificate was redeemed, the Pasco County tax
collector (tax collector) paid an amount that included both the
principal and interest accrued at the rate bid for the purchase
of the certificate. For the years in issue, the tax collector
issued Forms 1099 showing the amount of interest paid on the
redeemed certificates and the names of the payees.
Petitioner and Oneta Hernandez (Mrs. Hernandez) filed a
joint Federal income tax return for 1994. Mrs. Hernandez died
prior to respondent’s issuance of the statutory notice of
deficiency. For 1994, the tax collector issued Forms 1099
listing either petitioner or Mrs. Hernandez as a payee. Many of
the Forms 1099 also listed a copayee. In many of these
instances, the Forms 1099 listed the copayee’s Social Security
number rather than petitioner’s or Mrs. Hernandez’s Social
Security numbers.
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Last modified: May 25, 2011