- 11 - from ERG that we found to be constructive dividends to the Bensons. The Bensons also assert that ERG’s Forms 1120 disclosed deductions for payments, which were found to be constructive dividends to the Bensons. Respondent argues that the returns of NPI did not adequately disclose the nature and amount of the Bensons’ constructive dividend income. Respondent also argues that disclosures on amended returns are not relevant to the question of adequate disclosure. Respondent also argues that the corporate returns of ERG are not relevant to whether the Bensons made adequate disclosures on their individual tax returns because ERG was a taxable entity. A. Disclosures on Amended Returns and ERG Corporate Tax Returns Are Not Relevant to the Application of Section 6501(e)(1)(A)(ii) The Bensons argue that the amended returns of NPI disclose items of gross income for purposes of section 6501(e)(1)(A)(ii). Amended returns do not correct the omission of income from an original return. Houston v. Commissioner, supra; Goldring v. Commissioner, supra. Section 6501(e)(1)(A)(ii) requires respondent to examine only the Bensons’ original returns and the original returns of the passthrough entities listed on their returns. Any “clues” to omitted gross income on the amended 7(...continued) $31,020 in 1993, and $41,736 in 1994 from ERG’s so-called rent payments for the Lowell plant. Id.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