Danney R. Land - Page 5




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               “changing” my return, since there is no statute that                   
               allows the IRS to do that.  You might prepare a return                 
               (pursuant to Code Section 6020(b)) where no return is                  
               filed, but as in this case, a return has been filed, no                
               statute authorizes IRS personnel to “change” that                      
               return.                                                                
                              *   *   *   *   *   *   *                               
               * * * 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 August 11, 2000, respondent (acting through Deborah                 
          Decker, Director of the Service Center in Ogden, Utah) issued a             
          notice of deficiency to petitioner for the taxable year 1998.  In           
          the notice, respondent determined a deficiency in petitioner’s              
          Federal income tax in the amount of $36,178 and an accuracy-                
          related penalty under section 6662(a) and (b)(1) for negligence             
          or disregard of rules or regulations in the amount of $6,945.51.2           
               The deficiency in income tax was based on respondent’s                 
          determination that petitioner failed to report income in the                
          aggregate amount of $139,183, determined as follows:                        
                    Income                     Amount                                 
                    Wages (Lakeview Co.)       $17,401                                
                    Unemployment compensation    6,708                                
                    Capital gain               115,000                                
                    Interest income                 74                                
                               139,183                                                

               2  Insofar as his ultimate tax liability was concerned,                
          respondent gave petitioner credit for the amount withheld from              
          his wages.  However, we note that the determination of a                    
          statutory deficiency does not take such withheld amounts into               
          account.  See sec. 6211(b)(1).                                              





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