- 16 - attach certain documents to future tax returns to avoid any further audits with respect to this issue. The letter states in pertinent part: The attached report reflects the information regarding the taxability or non-taxability of the $40,000 income from Deloitte & Touche. We have received the additional information (court decision) from Mr. McDonald [petitioners’ representative] that validates the entries on line 22 of your 1992 Federal Income Tax return. We recommended to Mr. McDonald that a copy of the court decision be attached to each year’s return so as to avoid a continuous repetition of IRS contact regarding this issue. In 1996, Mr. Forste received $45,615 from DHS (then Deloitte & Touche). Petitioners excluded this amount from gross income on their Federal income tax return for 1996. An attachment to the return states that the amount received from DHS was “Workmens Compensation and non-taxable”. Petitioners followed respondent’s tax auditor’s advice in the February 12, 1996, letter, and they attached the letter from respondent’s tax auditor, their petition to the Tax Court for that year, and the first page of their 1990 return to their 1996 return.10 Respondent commenced an examination of petitioners’ 1996 return at some point after July 22, 1998. He subsequently issued a notice of deficiency to petitioners for 1996 in which he 10The parties stipulated a copy of petitioners’ joint Federal income tax return for 1996. The copy of the return in the record does not have attached the Tax Court decision for petitioners’ 1990 taxable year.Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011