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seized all of David’s records and those relating to Demetree and
Associates. In 1997, after respondent seized the records, Ms.
Lloyd terminated her employment relationship with David Demetree
and Associates Realtors. In 2000, respondent ended the criminal
investigation.
From 1983 through 1991, while petitioners were married,
Deborah filed separate income tax returns. David did not file
returns relating to 1983 through 1985. He delinquently filed his
1986 through 1989 returns on January 4, 1993, and his 1991 return
on January 26, 1993. Petitioners delinquently filed their 1992
return on October 19, 1993.
By notice of determination (notice), dated June 25, 1996,
respondent determined deficiencies, additions to tax, and
penalties relating to 1983, 1984, 1985, 1986, 1987, 1988, 1989,
and 1991. The deficiencies totaled $197,823; the section
6651(a)(1),1 6653(a), 6654(a), and 6661 additions to tax totaled
$80,303; and the section 6662 penalties totaled $10,594. On June
25, 1996, respondent sent petitioners a second notice in which he
determined a $4,040 deficiency and an $808 section 6662 penalty
relating to 1992.
By amendment to answer filed June 14, 2001, respondent,
after analyzing seized bank statements, checks, and deposit
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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