Cheryl McKnight - Page 10

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          payments and that no income taxes had been withheld from wages or           
          salary on their behalf.2                                                    
               All of the reported income on petitioner and John’s 1995               
          joint Federal income tax return, with the exception of a small              
          amount of interest income, consisted of income from MGI.  On the            
          above tax return and on related Schedules K-1, Shareholder’s                
          Share of Income, Credits, Deductions, etc., MGI’s reported income           
          was reflected as allocable equally to petitioner and to John.               
               Petitioner was generally aware of the $24,050 interest                 
          deductions on the mortgages and the $109,742 MGI income that were           
          reflected on her and John’s 1995 joint Federal income tax return.           
               From October of 1996 through December of 1997, with joint              
          marital assets, petitioner and John made 13 additional payments             
          totaling $11,657 on their $17,516 underpayment for 1995.                    
               On January 13, 1998, after an audit of petitioner and John’s           
          1995 joint Federal income tax return, respondent mailed to                  

               2  Also mailed to respondent with petitioner and John’s 1995           
          joint Federal income tax return was a $1,000 partial payment                
          toward the $17,516 balance due reflected on the return.  As a               
          result, the amount of petitioner and John’s 1995 tax underpayment           
          apparently should be $16,516.  Both parties, however, have                  
          treated the entire $17,516 balance due as the underpayment.  For            
          convenience herein, we refer to the underpayment amount as                  
          $17,516 and leave any modification thereof to the parties’ Rule             
          155 computation.  Further, with their 1995 tax return and the               
          $1,000 payment, petitioner and John mailed to respondent an                 
          additional $7,235 check reflecting the balance due on their then            
          outstanding 1993 joint Federal income taxes, and petitioner and             
          John made a request to pay in installments the remaining $16,516            
          balance due on their 1995 income tax liability.                             

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