The Connell Business Company, et al. - Page 3

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          Thomas E. and Sara Anne Connell:                                            
          docket No. 13671-01                                                         
          Accuracy-related penalties                                                  
          Year         Deficiency                 Sec. 6662(a)                        
          1995          $30,576.26                 $6,115.25                          
          1996           56,956.65                 11,391.33                          
          1997           24,371.16                  4,874.23                          
               Unless otherwise noted, all section references are to the              
          Internal Revenue Code in effect during the taxable years at                 
          issue, and all Rule references are to the Tax Court Rules of                
          Practice and Procedure.                                                     
               After concessions, the issues remaining for decision are:              
          (1) Whether the notice of deficiency issued to petitioners Thomas           
          E. and Sara Anne Connell was timely as to the 1995 and 1996 tax             
          years; and (2) whether respondent is estopped from asserting                
          deficiencies for the 1995, 1996, and 1997 tax years against                 
          petitioners Thomas E. and Sara Anne Connell because he                      
          prematurely assessed the deficiencies and later abated some, but            
          not all, of the assessments.2                                               

               2 Petitioners also contend that respondent has the burden of           
          proof with respect to all issues in these cases.  Respondent                
          concedes that he has the burden of proof on whether the 6-year              
          period of limitations under sec. 6501(e)(1)(A) applies with                 
          respect to petitioners Thomas E. and Sara Anne Connell’s 1995 and           
          1996 returns.  We conclude that the burden of proof has not                 
          shifted to respondent under sec. 7491(a) with respect to the                
          remaining issues.  The record in this case establishes that the             
          examinations of the 1995 and 1996 returns commenced before July             
          22, 1998, rendering sec. 7491 inapplicable to those years.  See             
          Internal Revenue Service Restructuring and Reform Act of 1998,              
          Pub. L. 105-206, sec. 3001(a), 112 Stat. 726.  As for 1997,                 
                                                             (continued...)           





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