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We held that the Bensons received additional dividend income of
$1,072 in 1994 because “Despite the fact that Eric reported the
amount credited on his 1994 return, the dividends are clearly
attributable to the Bensons and should have been reported by
them.” Id. We find that the disclosure of the 1994 Franklin
dividend on the return of Eric Benson, the Bensons’ son, does not
satisfy the disclosure requirement of section 6501(e)(1)(A)(ii).
See Greenway v. Commissioner, T.C. Memo. 1987-4 (“Reporting of
that income on their children’s returns, and petitioners payment
of taxes owed on it, does not satisfy the section
6501(e)(1)(A)(ii) requirement that the omission be ‘disclosed in
the return, or in a statement attached to the return, in a manner
adequate to apprise the Secretary of the nature and amount of
such item.’”).
For purposes of applying section 6501(e), we hold that the
Bensons’ omitted gross income in 1994 equals $337,092, which is
itemized as follows:
Items of omitted Amounts omitted
gross income by the Bensons
ERG recreation fund payments $2,698
Alice Lane--property taxes 8,196
Automobile expenses 14,723
Director’s fees 37,000
Esther Benson check 12,000
Townsend check 15,000
Travel expenses 3,889
Legal expenses 4,033
Employee relation’s expenses 3,035
Education expenses 9,166
Life insurance 4,781
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