Willie R. Davidson - Page 5




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               filed, no statute authorizes IRS personnel to “change”                 
               that return.                                                           
                              *   *   *   *   *   *   *                               
               NOTE:  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.  Respondent’s Deficiency Notice and Petitioner’s Response           
               On December 3, 1999, respondent issued a joint notice of               
          deficiency to the Davidsons.  In the notice, respondent                     
          determined a deficiency in the amount of $32,278 in the                     
          Davidsons’ Federal income tax for 1997 and an accuracy-related              
          penalty under section 6662(a) for negligence or disregard of                
          rules or regulations in the amount of $6,448.66.  The deficiency            
          was based on respondent’s determination that the Davidsons failed           
          to report:  (1) Wage income (as set forth in the Forms W-2                  
          mentioned above), and (2) a distribution from an ESOP (as                   
          reported to respondent by Northern Trust Co. on Form 1099-R).               
               By registered letter dated January 26, 2000, petitioner                
          wrote to the Director of respondent’s Service Center in Ogden,              
          Utah, acknowledging receipt of the notice of deficiency dated               
          December 3, 1999, but challenging the Director’s authority “to              
          send me the Notice in the first place.”2  Petitioner sent copies            
          of this letter by registered mail to Robert Rubin, Secretary of             


               2  Petitioner’s letter dated Jan. 26, 2000, stated in part:            
          “This letter is being submitted on my behalf only and exclusive             
          of my now ex-wife Dawn F. Davidson.”                                        





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