Lidia Lamanna - Page 2

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          section 7443A(b)(5) and Rules 180, 181, and 183.1  The Court                
          agrees with and adopts the opinion of the Chief Special Trial               
          Judge, which is set forth below.                                            
                         OPINION OF THE SPECIAL TRIAL JUDGE                           
               PANUTHOS, Chief Special Trial Judge:  This case is before              
          the Court on respondent’s motions for entry of decision in                  
          accordance with the parties’ stipulation of settled issues filed            
          on May 14, 2002.  As explained in detail below, we shall grant              
          respondent’s motions.                                                       
                                     Background                                       
               Respondent issued petitioners a statutory notice of                    
          deficiency, dated January 27, 1999, determining the following               
          income tax deficiencies, additions to tax, and penalties:                   
                                          Additions to Tax                            Penalty
                    Sec.           Sec.      Sec. Sec.      Sec.      Sec.            
          Year Deficiency     6651(a)    6653(a)(1)(A)   6653(a)(1)(B)   6653(a)     6654       6662(a)
          1986 $20,235       $5,059$1,012     50% of the        ---$980      ---             
                                        interest due                                  
                                        on $20,235                                    
          1987 48,438       12,110 2,422     50% of the---  2,618     ---             
                                        interest due                                  
                                        on $48,438                                    
          1988   36,091        9,023  --- ---       $1,805   2,308  ---               
          1989   37,235        9,309  --- --- ---   2,515       $7,447                
          1990   38,968        8,992  --- --- ---   2,370        7,194                
          1991   55,343       13,836  --- --- ---   3,185       11,069                
          The adjustments to income in the notice of deficiency were                  
          primarily due to respondent’s disallowance of various deductions            
          claimed on Schedule A and to the disallowance of total expenses             



               1  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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