George W. Earnshaw - Page 2




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          Code in effect for the year in issue, and all Rule references are           
          to the Tax Court Rules of Practice and Procedure.                           
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated, and the stipulated             
          facts are incorporated in our findings by this reference.                   
          Petitioner resided in Shawnee Mission, Kansas, at the time that             
          he filed the petition in this case.  Petitioner is a lawyer                 
          admitted to practice in Kansas.  Petitioner filed his income tax            
          return for 1998 using the cash receipts and disbursements method            
          of accounting.                                                              
               Prior to April 1996, petitioner had two credit card accounts           
          with MBNA, a Mastercard account and a Visa account.  On April 8,            
          1996, the balance due on petitioner’s Visa account was                      
          transferred to his Mastercard account.  On or about June 9, 1996,           
          petitioner sent to MBNA a check for $1,000, a copy of his May               
          1996 statement with a handwritten notation, and a separate                  
          handwritten note.  In the handwritten notation on the statement             
          and in the handwritten note, petitioner stated:  “My current                
          balance is $29,837.61.”  Petitioner requested verification or               
          correction of the balance.                                                  
               On August 12, 1996, petitioner obtained a cash advance of              
          $1,200 against his Mastercard account.  The sum advanced and a              
          $10 cash advance fee were posted to petitioner’s account on                 
          August 14, 1996.                                                            






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