Edward P. Heaphy - Page 2

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          respondent raised the issue of whether petitioner should be                 
          required to pay a penalty pursuant to section 6673 for                      
          instituting and/or maintaining this proceeding, and if so, the              
          amount thereof.1                                                            
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the exhibits submitted therewith are           
          incorporated herein by this reference.                                      
               At the time the petition was filed in this case, petitioner            
          resided in Ormond Beach, Florida.  He is a real estate broker.              
               Petitioner submitted to the Internal Revenue Service (the              
          IRS) a document purporting to be his income tax return for 1997,            
          with zeros reported for amounts on all lines.  The IRS did not              
          process that document.  Rather, the IRS prepared a substitute               
          1997 return for petitioner on which $65,419 was reflected as                
          commission income.2  That amount was determined in part from a              
          third-party information return ($46,369) and in part from an                
          analysis of petitioner’s bank deposits ($19,050).  The substitute           
          1997 return also reflected $463 of interest income.                         




               1All section references are to the Internal Revenue Code.              
               2In deciding this case, it is not necessary for us to decide           
          whether the substitute return meets the requirements of sec.                
          6020(b).  See, e.g., Swanson v. Commissioner, 121 T.C. 111, 112             
          n.1 (2003).                                                                 




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