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.Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011