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In 1982 and 1983, petitioners paid a total of only $39,170
and $50,000, respectively, in estimated and withheld Federal
income taxes.
On petitioners’ jointly filed Federal income tax returns for
1982 and 1983, petitioners reported $649,177 and $1,027,000 in
income from petitioner’s medical practice, and petitioners
claimed net losses of $575,171 and $671,937, respectively,
relating to petitioners’ various tax-sheltered partnership
investments, including losses relating to Blythe II of $83,732
and $4,024, respectively, for those years.
On audit, respondent disallowed the claimed losses relating
to petitioners’ investment in Blythe II. William G. Kellen, the
tax matters partner of Blythe II, initiated a proceeding under
the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L.
97-248, 96 Stat. 324, 648, and signed a stipulation to be bound
by the decision entered in Utah Jojoba I Research v.
Commissioner, T.C. Memo. 1998-6 (Utah I).
As a result of the final resolution of Utah I (wherein
claimed section 174 research and experimental expenses and losses
similar to those claimed by Blythe II were disallowed), the tax
deficiencies relating to petitioners’ investment in Blythe II are
conceded by petitioners.
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Last modified: May 25, 2011