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petitioner-husband in the amount of $57,013.3 The assessment was
made in connection with petitioner-husband’s position as a
responsible officer of Dynatrex, Inc., an S corporation.
Petitioner-husband owned one-third of the stock of Dynatrex, Inc.
at the time of the assessment. Dynatrex, Inc. ceased operations
by 1989 and did not file a Federal income tax return for the
taxable year 1997.
In 1997, respondent levied petitioner-husband’s IRA held at
Dean Witter Reynolds (Dean Witter) in order to collect the
liability from the section 6672 assessment. The IRA was in
petitioner-husband’s name only, and petitioner Matrona A.
Phillips (petitioner-wife) was listed as the beneficiary of the
IRA in the event of his death. Dean Witter complied with
respondent’s levy by turning over the entire balance of
petitioner-husband’s IRA, $10,452, which respondent applied to
the section 6672 liability. Dean Witter did not withhold any
amounts for payment of petitioners’ 1997 Federal income tax
liability.
On petitioners’ joint 1997 Federal income tax return,
petitioners reported gross income of $18,818, adjusted gross
income of $17,889, taxable income of $0, and self-employment tax
of $1,857. Petitioners had three qualifying children during 1997
3 All amounts are rounded to the nearest dollar.
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Last modified: May 25, 2011