- 4 - Petitioners filed delinquent income tax returns for 1993 and 1994. The 1993 return was filed on December 19, 1996, and the 1994 return was filed on June 10, 1996. Petitioners' 1995 return was timely filed. Attached to each return was a Schedule A and Schedules C. Petitioners reported adjusted gross income of $18,731, $16,756, and $17,353 for 1993, 1994, and 1995, respectively. A. Examination of Petitioners' Tax Returns In a letter dated November 1, 1996,2 petitioners were informed that respondent was proceeding with the examination of their 1993 tax year, for which a return had not yet been filed. Additionally, the examination had been expanded to include the Forms 1040, Individual Income Tax Return, they filed for 1994 and 1995. Forms 4564, Information Document Request (IDRs), were enclosed with the letter. Because of the audit results of petitioners' prior years, unreported income and the lack of substantiation of business deductions were significant areas of inquiry. Mr. McCarron (petitioner) met with respondent on December 19, 1996, and presented an original delinquent return for 1993 for filing. Petitioner did not have any documentation used in 2Sec. 7491, which shifts the burden of proof to the Secretary in certain circumstances, is inapplicable to this case. See Warbelow's Air Ventures, Inc. v. Commissioner, 118 T.C. 579, 582 n.8 (2002) (sec. 7491 is effective for court proceedings arising in connection with examinations commencing after July 22, 1998), affd. 80 Fed. Appx. 16 (9th Cir. 2003).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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