James D. Horn - Page 5

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          which $4,328 had been paid by withholding) and an estimated tax             
          penalty of $565.  In or around 1994, petitioner and his former              
          spouse filed a joint tax return for 1991 reporting total tax due            
          of $22,828 (of which $522 had been paid by withholding) and an              
          estimated tax penalty of $1,107.                                            
               After examining petitioner’s 1990 return, respondent                   
          proposed to disallow a $50,000 deduction claimed on Schedule E,             
          Supplemental Income and Loss, of petitioner’s 1990 return for               
          legal and professional fees, because petitioner could not                   
          substantiate the deduction.  On May 23, 1994, petitioner signed a           
          Form 4549-CG, accepting respondent’s adjustment for 1990 and a              
          resulting $15,348 deficiency, an addition to tax under section              
          6651(a)(1) of $3,836.75, and interest through June 15, 1994, of             
          $5,523.28.  Petitioner and his former spouse both signed the                
          Form’s “Consent to Assessment and Collection”, which reads as               
                    Consent to Assessment and Collection - I do not                   
               wish to exercise my appeal rights with the Internal                    
               Revenue Service or to contest in United States Tax                     
               Court the findings in this report.  Therefore, I give                  
               my consent to the immediate assessment and collection                  
               of any increase in tax and penalties, and accept any                   
               decrease in tax and penalties shown above, plus any                    
               interest as provided by law. * * *                                     
          This Form 4549-CG was signed on behalf of respondent by Revenue             
          Agent Joe Urrutia.                                                          
               Horn Enterprises dissolved at the end of 1993.  In 1994,               
          Horn Construction filed a chapter 11 bankruptcy petition.                   

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