Anthony M. Davich - Page 5




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                              *   *   *   *   *   *   *                               
                    10) In addition, don’t notify me that the IRS is                  
               “changing” my return, since there is no statute that                   
               allows the IRS to do that.  You might prepare a return                 
               (pursuant to Code Section 6020(b)), where no return is                 
               filed, but as in this case, a return has been filed, no                
               statute authorizes IRS personnel to “change” that                      
               return.                                                                
                              *   *   *   *   *   *   *                               
               *Note #1: The word “income” is not defined in the                      
               Internal Revenue Code. * * * But, as stated above, it                  
               can only be a derivative of corporate activity. * * *                  
               B.  Petitioner’s Failure To File for 1998                              
               Petitioner failed to file a return or submit to respondent a           
          Form 1040 for the taxable year 1998.                                        
               C.  Respondent’s Deficiency Notice and Petitioner’s Response           
               On December 8, 1999, respondent (acting through James J.               
          Walsh, District Director in Phoenix, Arizona) issued a notice of            
          deficiency to petitioner for the taxable years 1997 and 1998.  In           
          the notice, respondent determined deficiencies in petitioner’s              
          Federal income taxes, an addition to tax, and an accuracy-related           
          penalty as follows:                                                         
               Addition to Tax  Accuracy-related Penalty                              
          Year  Deficiency  Sec. 6651(a)(1)        Sec. 6662(a)                       
          1997    $2,966          —–-                 $593                            
          1998     9,914        $2,479                 ---                            
               Insofar as his ultimate tax liability was concerned,                   
          respondent gave petitioner credit for the amounts withheld from             
          his wages.  However, we note that the determination of a                    
          statutory deficiency does not take such withheld amounts into               





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