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Litigation
On August 8, 2001, petitioners timely filed a petition with
the Court.
On the morning of the trial in this case, petitioners mailed
to the IRS Ogden Service Center Forms 1040X, Amended U.S.
Individual Income Tax Return, for 1997 and 1998. The amended
returns eliminated the $447,653 distributive share of income from
BP Concessions for 1997 and indicated that the amount of tax owed
for each year was zero. At trial, petitioners presented no
evidence regarding any spousal defenses, any challenges to the
appropriateness of the collection actions, or any offers of
collection alternatives.
On September 22, 2003, the parties filed a stipulation of
settled issues. This stipulation stated:
1. In their petition, petitioners requested that
the Court determine, inter alia, that the amounts of
the assessments for petitioners’ 1997 and 1998 income
taxes are incorrect and are overstated because the
petitioners were entitled to revoke the subchapter S
election for BP Concessions, Inc. for years 1997 and
1998.
2. Petitioners concede that there is no
reasonable cause exception for their failure to timely
revoke the subchapter S status of BP Concessions, Inc.
for years 1997 and 1998.
OPINION
1. Applicable Law
Section 6321 provides that, if any person liable to pay any
tax neglects or refuses to do so after demand, the amount shall
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