- 4 -
payments, and she continued to do so for the remainder of the
year. The house was later sold, and the parties split the sale
proceeds.
During 1996, petitioner was aware that Ms. Morrison received
monthly benefits. Petitioner also knew that Ms. Morrison had
applied for and received a lump-sum benefit award separate from
her monthly benefits and that a portion of that award was used to
pay her divorce attorney.
During 1997, petitioner and Ms. Morrison agreed to file a
joint Federal income tax return for the 1996 tax year. Their tax
return was professionally prepared by Mr. James West. Petitioner
and Ms. Morrison met with Mr. West to discuss the joint tax
return and to deliver documentation to facilitate the return
preparation. At this meeting Ms. Morrison presented to Mr. West
her Form SSA 1099--Social Security Benefit Statement (benefit
statement), which detailed the benefits she received during 1996.
Upon reviewing the benefit statement, Mr. West incorrectly told
the parties that the entire benefit award was not taxable. Mr.
West returned the benefit statement to Ms. Morrison and did not
use it in the preparation of the joint return.
Petitioner’s motivation for filing a joint return was to
gain the benefit of Ms. Morrison’s and her family’s exemptions
and itemized deductions in order to offset his taxable income.
The joint return was initially audited by respondent during 1997,
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011