T.C. Memo. 2005-73
UNITED STATES TAX COURT
MICHAEL J. DOWNING AND SANDRA M. DOWNING, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent*
Docket No. 12108-98. Filed April 6, 2005.
R determined that (1) substantial amounts of income
from P-H’s plumbing business had not been reported on Ps’
separate income tax returns; (2) Ps’ marriage contract did
not have the effect of stopping application of Louisiana’s
usual community property laws for Federal income tax
purposes; and (3) each P is liable for the fraud penalty
(alternatively, the negligence penalty) for both years in
issue. In Downing v. Commissioner, T.C. Memo. 2003-347 we
held that (1) the marriage contract did prevent income-
splitting, and so P-W had no deficiency and no fraud (or
negligence) penalty; (2) substantial amounts of income were
omitted from P-H’s tax return; and (3) P-H is liable for
civil fraud.
P-W moves for an award of costs.
* This opinion supplements our previously filed opinion in
Downing v. Commissioner, T.C. Memo. 2003-347, hereinafter
sometimes referred to as Downing I.
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