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the year in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
Respondent determined a deficiency in petitioner’s Federal
income tax for the taxable year 1997 in the amount of $11,344.
The issues for decision are: (1) Whether respondent is barred by
the statute of limitations from assessing and collecting the
deficiency (this issue turns on the question of whether
petitioner filed an income tax return for 1997); (2) whether
petitioner failed to report wage income earned in 1997 in the
amount of $33,711; (3) whether petitioner failed to report income
from a long-term capital gain in the amount of $45,023, arising
from a deed in lieu of a foreclosure transaction; (4) whether
petitioner is entitled to innocent spouse relief; and (5) whether
petitioner is liable for additions to tax pursuant to sections
6651(a)(1)1 and 6654.
Background
The stipulation of facts and the attached exhibits are
incorporated herein by reference. At the time the petition was
filed, petitioner resided in McHenry, Illinois.
Petitioner and James Conner (Mr. Conner) were married on
July 13, 1974. Two children were born of the marriage. The
couple purchased a home in Barrington, Illinois, in May 1987, for
1 At trial, respondent conceded the addition to tax under
sec. 6651(a)(2); therefore that addition is no longer an issue
before us.
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