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under section 6651(a)(1), and an accuracy-related penalty under
section 6662(a).
The issues for decision are whether petitioner realized
discharge of indebtedness income under section 61(a)(12) and, if
so, the extent thereof under section 108(a), and whether
petitioner is liable for the section 6662(a) accuracy-related
penalty.2
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. Petitioner’s legal residence at the time the petition
was filed was Redondo Beach, California.
For approximately 3 years, including the year at issue,
petitioner was employed as bookkeeper for a company that was
engaged in the promotion and selling of stock or interests in
mining companies. For reasons not established at trial, the
activities of petitioner’s employer ran afoul of the United
States Securities and Exchange Commission (SEC), and, as the
result of a court proceeding, the activity was terminated. Some
of the principals in the activity were charged criminally.
Petitioner was not charged with any criminal activity; however,
she was a defendant in a civil action by the SEC for the actions
of her employer. Based on the claim that petitioner had received
2At trial, petitioner conceded she is liable for the sec.
6651(a)(1) addition to tax if the Court sustains the deficiency.
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Last modified: May 25, 2011