Nancy M. O'Neill, Petitioner, and Robert B. Wollow, Intervenor - Page 3

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          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.                 

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