- 17 -
Hong Lai and Gioni Birkenfeld lent to petitioner to purchase the
cashier’s check on their behalf. As noted supra, loan proceeds
do not constitute income to a taxpayer. Id. We therefore hold
that the amount of the cashier’s check does not represent income
to petitioner.7
Based on the credible documentary evidence and credible
corroborating testimony, petitioner has established by a
preponderance of the evidence that a portion of the disputed
determinations is erroneous. However, petitioner has not carried
her burden of proof with regard to the remaining portion of the
deficiency. We therefore partially uphold respondent’s
determination.
7 Generally, the Commissioner may assess taxes only within
3 years after a taxpayer files his or her income tax return.
Sec. 6501(a). However, if a taxpayer omits from gross income an
amount properly includible therein which is in excess of 25
percent of the amount of gross income stated in the return, the
Commissioner may assess income taxes for that year at any time
within 6 years after the return was filed. Sec. 6501(e)(1)(A).
In the matter before us, the notice of deficiency was issued on
Oct. 5, 2004. Petitioner filed her 1999 income tax return on or
about Oct. 20, 2000. Thus, without regard to application of the
sec. 6663 fraud penalty, discussed infra, unless sec. 6501(e)
applies, that year falls outside the period of limitations, and
respondent may not assess additional tax for 1999. It appears
that the 6-year period of sec. 6501(e) may not apply to
petitioner’s 1999 tax year. See sec. 6501(e)(1)(A)(i). If,
pursuant to the parties’ Rule 155 calculations, sec. 6501(e) does
not apply to petitioner’s 1999 tax year, respondent may not
assess additional taxes for 1999. Sec. 6501(a).
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: November 10, 2007