- 5 -
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
follows:
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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