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FINDINGS OF FACT
Petitioners lived in Richmond, Virginia, when they filed
their petition in this case.
From 1998 through at least 2001, petitioners were involved
in transactions with Anderson Ark & Associates,2 pursuant to
which they purported to create a TEFRA partnership and
purportedly incurred a liability so as to create basis and cause
large losses to be shown on their income tax returns for several
years. Petitioners offset their income with net operating losses
of $183,455 for 2000 and $110,367 for 2001 from the purported
partnership. They also claimed a loss of $32,065 on the Schedule
E attached to their 2001 Federal income tax return. Petitioners
claimed itemized deductions of $31,893 for 2000 and $21,875 for
2001, including medical and dental expenses, real estate taxes,
other taxes, home mortgage interest, cash contributions, noncash
contributions, and miscellaneous expenses.
Respondent audited petitioners’ returns for 2000 and 2001
and determined deficiencies and additions to tax. Respondent
also determined that petitioners overreported capital gain income
by $9,894 for 2001.
Petitioners provided no documents or other evidence to
support their claimed deductions or to show that respondent’s
2 An organization named Anderson Ark & Associates was
engaged in facilitating income tax evasion and bankruptcy fraud.
See United States v. Anderson, 391 F.3d 970, 972 (9th Cir. 2004).
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Last modified: May 25, 2011