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On March 29, 1995, respondent received an amended 1989
Federal income tax return from petitioners. The amended return
has not been included in the record, but apparently the
deductions previously claimed and disallowed were increased,
other deductions not claimed on the original return were claimed,
and petitioners reported an income tax liability on the amended
return that was less than the income tax liability reported on
the original return. We cannot tell whether or how the amended
return was processed.
By the time the amended return was filed, petitioners and
other similarly situated taxpayers had cases pending in this
Court in which they disputed the Commissioner’s disallowances of
deductions similar to the deductions that gave rise to the
determination of petitioners’ 1989 deficiency. Furthermore,
legislation had been proposed that would have partially or fully
allowed for the types of deductions in dispute in the Tax Court
cases. These cases were held in suspense for several years
pending enactment of the legislation; however, the proposed
legislation was never enacted. The Tax Court cases were resolved
by agreement during 2000 after further settlement negotiations
with the Commissioner’s Appeals Office (the settlement position).
The settlement position was applied to petitioners’ 1990
year, which apparently had been examined before that time. As a
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