- 11 - Mr. Walker died on August 31, 2001, while his refund claim for 1997 was pending. On July 24, 2002, respondent disallowed the refund claim that was filed by Mr. Walker for 1997 and sent to petitioner a notice of deficiency for 1997 and 1998. The notice of deficiency determined that petitioner’s total tax liabilities were $11,221 for 1997 and $52,017 for 1998. Consequently, respondent determined deficiencies of $9,104 and $32,949 in petitioner’s Federal income taxes for 1997 and 1998, respectively, and accuracy-related penalties of $1,821 and $6,590 under section 6662(a) for 1997 and 1998, respectively. The deficiencies were based on petitioner’s failure to report the gain on the sale to Parker Development of the 25-percent interest in the Happy Valley property that had been transferred to her from Mr. Walker in September 1997. The accuracy-related penalties were imposed because the underpayment of tax on petitioner’s 1997 and 1998 returns was determined to be attributable to petitioner’s negligence or disregard of the rules or regulations under section 6662(b)(1) or, alternatively, to a substantial understatement of income tax under section 6662(b)(2). The “Whipsaw” Position This case is related to a refund action that is pending before the U.S. Court of Federal Claims, Walker Family Trust v. United States, No. 02-1454 T. The Walker Family IrrevocablePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011