Charles B. Owens and Sally L. Owens - Page 8




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               Petitioners submitted a written protest in response to                 
          respondent’s 30-day letter.  Thereafter, petitioners and                    
          respondent were unable to resolve the issues set forth in                   
          respondent’s 30-day letter.  By letter dated November 2, 2000,              
          respondent determined a deficiency in petitioners’ 1996 income              
          tax liability of $36,048 and an accuracy-related penalty under              
          section 6662 (for negligence or disregard of rules or                       
          regulations) of $7,209.60.5                                                 
               On January 16, 2001, petitioners filed their petition                  
          assigning error to respondent’s determinations.6  On March 19,              
          2001, respondent filed his answer denying that he had erred.  The           
          case was set for trial at the Court’s trial session commencing on           
          December 3, 2001, in Houston, Texas.  Prior to that date,                   
          respondent communicated to petitioners his intent to concede the            
          case.  When the case was called from the trial calendar, the                
          parties filed a Stipulation of Settled Issues, pursuant to which            
          (1) respondent conceded the proposed income tax deficiency and              
          penalty, and (2) petitioners reserved their right to file a                 
          motion for costs under section 7430.                                        



               5  The small differences between the deficiency and penalty            
          figures in the 30-day letter as compared to those in the notice             
          of deficiency appear to be due to the correction of mathematical            
          errors.                                                                     
               6  Petitioners resided in San Antonio, Tex., when they filed           
          their petition in this case.                                                





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