William G. Koenig - Page 5




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               (pursuant to Code Section 6020(b)), where no return is                 
               filed, but as in this case, a return has been filed, no                
               statute authorizes IRS personnel to “change” that                      
               return.                                                                
                              *   *   *   *   *   *   *                               
               *Note #1: The word “income” is not defined in the                      
               Internal Revenue Code. * * * But, as stated above, it                  
               can only be a derivative of corporate activity. * * *                  
               B.  Respondent’s Notice of Deficiency                                  
               On February 18, 2000, respondent (acting through Deborah S.            
          Decker, Director of the Customer Service Center in Ogden, Utah)             
          issued a notice of deficiency to petitioner for the taxable year            
          1998.  Respondent mailed the notice to petitioner at his Las                
          Vegas address.  In the notice, respondent determined a deficiency           
          in petitioner’s Federal income tax and an accuracy-related                  
          penalty as follows:                                                         
               Accuracy-related Penalty                                               
          Year     Deficiency            Sec. 6662(a)                                 
          1998       $6,148               $783.93                                     
               Insofar as his ultimate tax liability was concerned,                   
          respondent gave petitioner credit for the amount withheld from              
          his wages.  However, we observe that the determination of a                 
          statutory deficiency does not take such withheld amount into                
          account.  See sec. 6211(b)(1).                                              
               The deficiency in income tax was based on respondent’s                 
          determination that petitioner failed to report wages in the                 
          amount of $40,592, as well as interest in the amount of $88.                







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