- 11 -
Mr. Williams’s joint 1993 and 1994 income tax returns reflect the
reporting of gross income in the amounts of $65,520 and $96,228,
respectively. There is no mention on those returns of the
$25,000 or $35,000 payment received by petitioner from the
corporation during 1993 or 1994. Twenty-five percent of the
income reported for 1993 and 1994 is $16,380 and $24,057,
respectively. Therefore, the $25,000 and $35,000 bonuses, which
were includable in and omitted from gross income for 1993 and
1994, respectively, were in excess of 25 percent of the gross
income reported for each year within the meaning of section
6501(e). Accordingly, we hold that the period for assessment had
not expired for 1993 and 1994 on April 13, 1999, the date
respondent mailed the notice of deficiency to petitioner and Mr.
Williams.
The third issue presented for our consideration involves
respondent’s determination that, for 1995, petitioner and Mr.
Williams had incorrectly reported as wages a premature withdrawal
of $1,300 from a pension account that was subject to the 10-
percent penalty under section 72(t). Respondent determined that
the $1,300 should be removed from income in the wage category and
included in income in the pension category. Those adjustments
cancel each other out and do not result in an increase in the
gross income of petitioner and Mr. Williams. Changing the
category of the $1,300, however, resulted in a $130 (10-percent
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011