Leroy Vernon and Anne J. Satrang - Page 3




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          Satrang for lack of prosecution, we must decide whether Leroy               
          Vernon Satrang (petitioner) may deduct his alleged gambling                 
          losses.  We hold he may not.  We also must decide whether                   
          petitioner is liable for the accuracy-related penalty determined            
          by respondent.  We hold he is.  Unless otherwise indicated,                 
          section references are to the Internal Revenue Code as applicable           
          to the subject year, Rule references are to the Tax Court Rules             
          of Practice and Procedure, and dollar amounts are rounded to the            
          nearest dollar.                                                             
               Some facts have been stipulated and are so found.  The                 
          stipulated facts and the exhibits submitted therewith are                   
          incorporated herein by this reference.  Petitioners are husband             
          and wife, and they resided in Sioux City, Iowa, when their                  
          petition was filed.                                                         
               Petitioner, a civil engineer by profession, is a                       
          recreational gambler who bets primarily on horse races.  During             
          the subject year, he won at least 29 of his gambling bets and               
          received a total of at least $32,050 in gambling winnings.  He              
          reported none of those winnings on his 1996 Federal income tax              
          return even though he received Forms W2-G, Gambling Winnings,               
          listing those winnings.  He asserts that none of the winnings are           
          taxable to him because his gambling losses during that year                 
          totaled more than $70,000.  His employer paid $51,600 to                    








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