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adjustments, respondent would attribute the income of the trust
to Michael.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year at issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
Issues for Decision
The principal issues we must decide are as follows:
Whether we have jurisdiction to redetermine the deficiency
and penalty determined by respondent with respect to the trust;
if so, whether the trust omitted from its return certain gross
receipts and interest and overstated certain expenses; if so,
whether the trust is subject to an accuracy-related penalty under
section 6662; whether the Careys (1) omitted from their return
gross receipts and interest reported by the trust and certain
business receipts and (2) overstated certain deductions;
whether the Careys are liable for self-employment tax for 1995
allocable to Michael (and are entitled to a related deduction) on
account of omitted earnings from self-employment;1 whether the
exemption and earned income credit claimed by the Careys must be
1 The amount of the Careys’ liability for self-employment
tax and the amount of the deduction under sec. 164(f) to which
they are entitled are computational matters, the resolution of
which will depend upon our disposition of other issues. Since
the Careys have challenged that liability and deduction only on
computational grounds, we shall not further discuss those items.
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