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of $614,205, payments of $472,903, and $141,302 due with the
return. Petitioner and Mr. Sturges did not remit the $141,302
with the return. Mr. Sturges attached to the return a letter
advising the Internal Revenue Service (IRS) that he would be
filing a Form 656, Offer in Compromise, and a Form 433-A,
Collection Information Statement for Individuals.
Petitioner and Mr. Sturges attached to the joint return a
document entitled “Section 83(b) Election” pursuant to which Mr.
Sturges elected to include the value of 190,167 shares of Tiburon
restricted stock in his gross income for 2000, the year the stock
was transferred to him. The document stated that each share had
a value of 30 cents on October 23, 2000, the date the shares were
transferred to him, and that Mr. Sturges had paid $57,050.10 for
the stock.
By August 2001, petitioner and Mr. Sturges had approximately
$13,000 remaining in their Paine Webber accounts. When
petitioner signed the 2000 return, she and Mr. Sturges did not
have $141,302 to pay the tax shown as owed on the return. She
discussed the unpaid tax liability with Mr. Sturges. Mr. Sturges
told petitioner that he did not have the money to pay the
outstanding tax because he had “entrusted” all the funds to Paine
Webber but that he had enough Tiburon options to cover the tax
liability.
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