T.C. Memo. 2003-347
UNITED STATES TAX COURT
MICHAEL J. DOWNING AND SANDRA M. DOWNING, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12108-98. Filed December 29, 2003.
Ps resided in Louisiana, a community property State.
Shortly before their wedding, in 1989, they “filed for
registry” (La. Civ. Code Ann. art. 2332 (West 1985)) in St.
Tammany Parish (where both of them then resided) a marriage
contract which provided that “The intended husband and wife
shall be separate in property * * *.” Before the years in
issue (1994 and 1995), Ps moved to Jefferson Parish. P-H
operated a plumbing business during the years in issue. Ps
filed separate tax returns for the years in issue, on which
they reported only their respective incomes, without regard
to Louisiana’s usual community property laws. R determined
that (1) substantial amounts of income from P-H’s plumbing
business had not been reported on Ps’ separate income tax
returns, (2) the marriage contract did not have the effect
of stopping application of Louisiana’s usual community
property laws for Federal income tax purposes, (3) both Ps
are liable for the fraud addition to tax for both years in
issue, and (4) there were other miscellaneous adjustments.
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