Charles B. Owens and Sally L. Owens - Page 1















                                 T.C. Memo. 2002-253                                  


                               UNITED STATES TAX COURT                                


                 CHARLES B. OWENS AND SALLY L. OWENS, Petitioners v.                  
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 672-01.            Filed October 3, 2002.                   


                    R determined a deficiency in tax, and an                          
               accompanying accuracy-related penalty, attributable to                 
               Ps’ failure to account for discharge of indebtedness                   
               income in 1994.  Ps filed a petition for                               
               redetermination, and R subsequently conceded the entire                
               case.  Ps seek recovery of administrative and                          
               litigation costs in the amount of $10,978.74 pursuant                  
               to sec. 7430, I.R.C.                                                   
                    1.  Held:  R’s position with respect to the                       
               discharge of indebtedness issue was substantially                      
               justified within the meaning of sec. 7430(c)(4)(B)(i),                 
               I.R.C.                                                                 
                    2.  Held, further, R’s position with respect to                   
               the penalty issue was not substantially justified                      
               within the meaning of sec. 7430(c)(4)(B)(i), I.R.C.                    
                    3.  Held, further, Ps are entitled to recover                     
               costs in the amount of $1,449.58.                                      






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