Jeffrey Chou and Cindy Chou - Page 15




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          Section 6330 and Liability for 2001                                         
               Our jurisdiction in this case is predicated upon section               
          6330(d)(1)(A), which gives the Tax Court jurisdiction “with                 
          respect to such matter” as set forth in the determination of the            
          Appeals Office.  Greene-Thapedi v. Commissioner, 126 T.C. 1, 6              
          (2006); Freije v. Commissioner, 125 T.C. 14, 25 (2005).                     
               Petitioners originally reported almost $2 million in AMT               
          liability for 2000 as a result of Mr. Chou’s exercise of his                
          Cisco options.  Stunned by the consequence and unable to secure             
          relief through an OIC, petitioners then filed amended returns               
          claiming that the liability should have been reported in 2001,              
          when it would be substantially lower because of the reduced value           
          of the stock.  Petitioners now contend that, by assessing the tax           
          based on their amended 2001 return, the IRS “accepted” their                
          position and is required, by the “duty of consistency”, to abate            
          the liability for 2000.                                                     
               In their amended returns, in their OIC, and in their briefs,           
          petitioners assert that the capital gains holding period under              
          section 422 renders the stock that they acquired through exercise           
          of Cisco ISOs nontransferable for 12 months without “forfeiture”            
          of the favorable tax rates on capital gains.  Their argument                
          cites section 83(a), which deals with the time for recognizing              
          income from property transferred in connection with the                     
          performance of services.  This “risk of forfeiture” argument is             







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