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Respondent determined a deficiency in petitioners’ 1998
Federal income tax in the amount of $16,353, together with a
penalty under section 6662(a) in the amount of $3,271. After
concessions by respondent, the issues this Court must decide are
whether petitioners proved that respondent’s determination was
incorrect, and whether petitioners are liable for the accuracy-
related penalty under section 6662(a).
Some of the facts in this case have been stipulated and are
so found. Petitioners resided in Fresno, California, at the time
they filed their petition. Their petition is replete with tax
protester type arguments. Petitioners filed a statement, which
has as its core thesis that this case should be:
dismissed for lack of Subject Matter Jurisdiction on the
grounds that the Notice of Deficiency issued by respondent
was issued on hearsay facts and evidence. Petitioner
demands that respondent provide certified facts or evidence
of a statutory correct assessment or tax liability to
support any claimed deficiency. Lacking a statutory correct
assessment or tax liability the notice of deficiency is null
and void and this court does not have Subject Mater
Jurisdiction.
Respondent made a number of determinations which are
described in pertinent part below. Respondent determined that
the BVE and Sweetbush Business Trusts, purportedly created by
petitioners, are shams with no economic substance and increased
petitioners’ business income by the gross receipts of the trusts,
less ordinary and necessary business expenses. Respondent also
determined gross income from Sweetbush Trust bank deposits (the
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Last modified: May 25, 2011