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bid by the certificate’s original purchaser. Id. Upon redemption
of a tax certificate, the county tax collector must remit the
amounts received, including accrued interest, to the
certificate’s holder, whereupon the certificate is canceled. Id.
Issue 1. Interest Income
Petitioners reported $24,082.49 of taxable interest income
and $28,287.52 of tax-exempt interest income on their 1996
Federal income tax return. Respondent determined that
petitioners failed to report $28,837 of taxable interest income
for that year. Respondent’s determination was based on several
Forms 1099 received from various entities reporting taxable
interest payments made to petitioners. The Forms 1099 providing
the basis for respondent’s determination are summarized below:
Payor Payee Amount
Southwest Trust Bank Mr. Penn $ 457
Bank of Pensacola Mr. Penn 244
Tax Collector - Bay County Mrs. Penn 433
Tax Collector - Escambia County Mr. Penn 15,525
Tax Collector - Escambia County Mrs. Penn 12,178
Total $28,837
At trial, respondent presented the testimony of Richard
Stone, a deputy tax collector with the Escambia County tax
collector’s office, and documentary evidence establishing that
petitioners received $27,703 of interest income from Escambia
County, Florida, tax certificates that were redeemed during 1996.
We therefore find that petitioners received interest income in
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