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Disclosure Statement.3 The Internal Revenue Service (IRS)
accepted the 2000 amended return that Mr. Isaacson prepared.
The 2000 amended return reported wages from Veritas of
$563,974 rather than the $137,261 initially reported. The
increase of $426,713 in wages was attributable to sales of
Veritas stock by petitioner which did not qualify for capital
gain treatment and had to be included in ordinary income, a
subject discussed in more detail later in this opinion.
As a result, for regular tax purposes, petitioner reported
$44,914 in capital gains rather than the $425,161 initially
reported, miscellaneous income remained the same at $8,104, and
itemized deductions were increased by $204,703 to total $293,547.
The changes resulted in taxable income of $616,992. The 2000
amended return reported regular income tax of $103,058 and AMT of
$869,828, for a total tax liability of $972,864, after deducting
a foreign tax credit of $22. Petitioner’s total tax liability
3 Each return and amended return Mr. Isaacson prepared
included a Form 8275 which contained Mr. Isaacson’s tax opinion
letter to petitioner. To avoid certain penalties, Form 8275 is
used by taxpayers and income tax return preparers to disclose
items or positions that are not otherwise adequately disclosed on
a tax return. The form is filed to avoid the portions of the
accuracy-related penalty due to disregard of rules or to a
substantial understatement of income tax for non-tax-shelter
items if the return position has a reasonable basis. It can also
be used for disclosures relating to preparer penalties for
understatements due to unrealistic positions or disregard of
rules.
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Last modified: May 25, 2011