- 4 - other than the tax matters partner of Shavano filed a petition for readjustment with the U.S. District Court for the Northern District of California (District Court case). On June 9, 2005, petitioner submitted to the IRS a Form 8857, Request for Innocent Spouse Relief, seeking relief from joint and several liability on the joint return he filed for the taxable year 1999. Petitioner requested that the full amount of the tax due for 1999 be allocated in equal shares to him and to Cathleen Adkison pursuant to section 6015(c). Petitioner has not received a notice of determination from the IRS with regard to his Form 8857. On November 10, 2005, respondent sent a joint notice of deficiency for 1999 to petitioner and Cathleen Adkison. The deficiency of $5,837,482 set forth in the notice is attributable to the following adjustments related to the Adkisons’ participation in Shavano: (1) The disallowance of a capital loss of $27,213,056; (2) the disallowance of a partnership loss of $184,822; and (3) a reduction of itemized deductions (investment interest expense) of $812,327. The notice of deficiency includes an explanation that respondent made a number of alternative determinations including a determination that Shavano was a sham and/or Shavano was formed solely for the purposes of tax avoidance.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: November 10, 2007