- 4 - Augustin B. Jombo had diplomatic status when he won the New York Lottery in 1989. His winnings are being paid out over a twenty-year period. Prior audits have denied Mr. Jombo gambling losses against his lottery winnings under Reg. 1.165-10. The Internal Revenue Service Agent in charge of the audit ruled that Mr. Jombo was considered to have won the lottery in 1989, which is the only year he is considered to have “gambling winnings.” Therefore, since all his gambling winnings were considered to have taken place in 1989, his diplomatic status would exempt his lottery winnings from income taxation. Mr. Jombo should not have to pick up gambling winnings from the twenty-year payout as taxable income, because he won the lottery in 1989 when he had diplomatic status. Petitioner claimed a $4,237 net operating loss (NOL) on his 1996 return. In a separate statement attached to his 1996 return, petitioner identified the NOL as a “net operating loss carryover”, but he did not state from which year or years he was carrying the loss. Respondent sent petitioner a letter dated May 7, 1998, informing him that his 1996 Federal income tax return had been selected for examination. OPINION A. Petitioner’s Contentions Petitioner contends that: (1) Respondent bears the burden of proof for all issues; (2) he is not liable for tax on his 1996 lottery payment because he constructively received all of his lottery winnings in 1989 when he was a tax-exempt employee of the Nigerian Consulate General; (3) his 1996 lottery winnings are a nontaxable annuity; (4) he is entitled to a net operating loss carryover deduction of $4,237 in 1996; and (5) he is not liablePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011