- 3 - interest is the type of income that is taxable under the Internal Revenue Code.1 Background Petitioners resided at Coquille, Oregon, at the time their petition was filed in this case. Petitioners filed Forms 1040, U.S. Individual Income Tax Return, for years prior to 1992. For 1992 and subsequent years, including the years in issue, petitioners filed Forms 1040NR, U.S. Nonresident Alien Income Tax Return, generally reflecting that they were not subject to income tax. For the years 1994, 1995, and 1996, petitioner Ronald Joling hauled goods by truck in return for compensation. During the years 1994, 1995, and 1996, petitioners owned the Myrtle Lane Motel, from which they received income from rental proceeds. During the years 1994, 1995, and 1996, petitioners received income from payments received for the sale of real property. For 1996, each petitioner received income from a 1 In their argument, petitioners reference sec. 1.6662- 4(d)(3)(iii), Income Tax Regs., concerning the definition of “substantial authority” for purposes of the accuracy-related penalty of sec. 6662. No accuracy-related penalty, however, is in issue here. Respondent determined income tax deficiencies and additions for delinquency (late-filing) and failure to pay estimated tax. In that regard, petitioners have admitted that they did not report income and/or file Forms 1040, U.S. Individual Income Tax Return, for the years in issue. Accordingly, we assume that petitioners’ reference to substantial authority is some form of guideline or standard by which they personally measure their acceptance of their legal conclusion that the income tax is, in reality, an excise tax, a subject that is discussed infra.Page: Previous 1 2 3 4 5 Next
Last modified: May 25, 2011