- 4 -
Charitable deduction –- –- 50,000 –-
Excess rent--Stanford –- 40,067 46,560 63,444
Rent--Lowell 29,400 29,400 31,020 41,736
Director’s fees 6,000 23,000 42,000 49,000
Townsend check –- –- –- 15,000
Travel expenses –- –- –- 3,889
Legal expenses –- –- –- 4,033
Life insurance payments 2,404 2,480 -- 4,781
Education payments -- -- 2,599 9,166
Royalty income 709 -- 570 586
Franklin dividend income 193 691 987 1,072
Forgiveness of debt income -- -- -- 88,291
Employee relations expenses -- -- -- 3,035
Total 629,177 456,500 3,831,923 469,713
1 All figures are rounded to the nearest dollar.
2 Respondent conceded that the Bensons are entitled to a deduction of
$77,973 in 1989 with respect to legal expenses.
The parties agree that the normal 3-year period of
limitations in section 6501(a) would bar assessment of
deficiencies for these years unless the exception in section
6501(e) applies. Thus, we must decide whether the 6-year period
of limitations provided by section 6501(e)(1) applies to the
Bensons’ 1989, 1990, 1993, and 1994 returns.3
Respondent argues that section 6501(e)(1)(A) extended the
period of limitations to 6 years because the Bensons omitted
gross income in excess of 25 percent of their reported gross
income in 1989, 1990, 1993, and 1994. Respondent has the burden
of proving that the Bensons omitted more than 25 percent of gross
income. See Harlan v. Commissioner, 116 T.C. 31, 39 (2001).
3 Respondent had also argued that the exception to the
statute of limitations for fraud applied. See sec. 6501(c). In
Benson v. Commissioner, T.C. Memo. 2004-272, we found that
respondent did not satisfy his burden of proving fraud by clear
and convincing evidence.
Page: Previous 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