Searcy M. Ferguson, Jr., and Elizabeth L. Ferguson - Page 24

                                       - 24 -                                         
          deficiency suits).  Consequently, we do not decide whether the              
          discharge in bankruptcy released petitioners from the liability             
          for the section 6651 addition to tax.18                                     
          Accuracy-Related Penalty                                                    
               Respondent contends that petitioners’ 2000 Federal income              
          tax return reflected a substantial understatement, that                     
          there was no reasonable cause for the understatement, and,                  
          consequently, that petitioners are liable for an accuracy-related           
          penalty pursuant to section 6662(a).                                        
               Section 6662(a) imposes a 20-percent accuracy-related                  
          penalty with respect to the portion of any underpayment of tax              
          attributable to a substantial understatement of income tax.  An             
          “understatement” is the excess of the amount of tax required to             
          be shown on the return over the amount of tax that is actually              
          shown on the return.  Sec. 6662(d)(2)(A).  A “substantial                   


               18Petitioners’ amended petition contended, inter alia, that            
          the bankruptcy estate paid the entire tax liability determined by           
          the bankruptcy court, that the bankruptcy court discharged                  
          petitioner on Apr. 7, 2004, and, consequently, that respondent is           
          precluded from subsequently asserting any deficiency against                
          petitioners.  Petitioners made no further contention at trial or            
          on brief that the bankruptcy court discharged the underlying 2000           
          tax liability at issue, and the parties have presented no                   
          evidence with respect to such a discharge.  As discussed above,             
          this Court lacks jurisdiction to decide whether a deficiency was            
          discharged in a prior bankruptcy proceeding.  Neilson v.                    
          Commissioner, 94 T.C. 1, 9 (1990); Graham v. Commissioner, 75               
          T.C. 389, 396 (1980).  Consequently, we do not decide whether the           
          bankruptcy court discharged the underlying deficiency, addition             
          to tax, or accuracy-related penalty for petitioners’ 2000 tax               
          year.                                                                       





Page:  Previous  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  Next

Last modified: May 25, 2011