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times the amount you owe. For example, if you owe
$5000, your income is $65,000. This will be in
addition to your other income. It will be subject to
tax at 28 percent (18,200 in this example).
The last payment by petitioners to RCR 85-2 that appears in the
record is a payment of $1,000 by check dated March 10, 1994,
purportedly for a “tax levy”.
II. Petitioners’ Federal Income Tax Returns
Petitioners filed a joint Federal income tax return for each
of the taxable years 1984 through 1989. In 1984, the return was
prepared by a firm in Lodi, California, that was unaffiliated
with Mr. Hoyt. In 1985, no return preparer signed petitioners’
return. In 1986 through 1989, the returns were prepared by
individuals associated with entities affiliated with Mr. Hoyt.
The relevant information from the 1984 through 1989 returns is as
follows:
For 1984, petitioners filed a return that reported a total
tax liability of $7,586.
For 1985, petitioners filed a return that reported a total
tax liability of $7,326.
For 1986, petitioners filed a return that reflected a
partnership loss of $35,530, and a general business credit
offsetting their tax liability of $452, resulting in zero tax
liability and a requested refund of $11,085. Respondent,
however, did not send petitioners the requested refund, pursuant
to the letter from respondent to petitioners discussed above.
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