- 3 -
District of California (the bankruptcy court). At the time of
petitioner’s bankruptcy proceeding, Mr. Wollow was involved in
his own bankruptcy proceeding. On July 7, 1999, the bankruptcy
court granted petitioner a discharge.
In April 1999, Mr. Wollow informed petitioner that,
according to his preliminary calculations, they owed income taxes
for 1998 (the 1998 joint liability). Petitioner offered to pay
the 1998 joint liability out of her severance pay from the
mortgage banking company. At the suggestion of Mr. Wollow,
however, petitioner ultimately agreed that her individual
retirement account (IRA) would be seized by the bankruptcy court
and used to pay the 1998 joint liability.
On August 15, 1999, petitioner and Mr. Wollow timely filed a
joint Federal income tax return for 1998 (the joint return). On
the joint return, petitioner and Mr. Wollow reported wages in the
amounts of approximately $140,000 and $145,000, respectively, and
Federal income tax withholding in the amounts of $21,615 and
$26,547, respectively. The joint return showed income tax due in
the amount of $5,294.2 Instead of submitting a payment with the
joint return, petitioner and Mr. Wollow attached a letter in
which they advised respondent of their respective bankruptcy
2The amount of tax shown as due on the joint return was also
attributable to IRA distributions that petitioner and Mr. Wollow
received in the amounts of $2,708 and $1,877, respectively.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011