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(3) Whether petitioners are liable for an addition to tax
under section 6651(a)(1) for failure to timely file an income tax
return. We hold that they are.
Background
Some of the facts have been stipulated, and they are so
found. Petitioners resided in Southfield, Michigan, at the time
that their petition was filed with the Court.
A. Petitioners
During 1997, the taxable year in issue, petitioner Robert
Lee Waters (petitioner) was employed full-time as a teacher by
the Board of Education of Detroit, Michigan. During that same
year, petitioner Rebecca Waters was a housewife.
B. Acquisition of the Hazelwood Property
In June 1986, a group of six individuals (the land contract
vendees) purchased a parcel of improved real estate in Detroit,
Michigan (the Hazelwood property), under a land contract. The
land contract vendees included petitioners, petitioner’s father,
Marland and Dortha Moore, and Marland Moore’s mother. The
Hazelwood property consisted of a 38-unit, 4-story apartment
building with an elevator. The memorandum of land contract that
was recorded with the Register of Deeds for Wayne County,
Michigan, did not disclose the purchase price of the Hazelwood
property.
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