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3. Conclusion
The Derbys understated Dr. Derby's 1994 income from the
corporation to the extent of $3,665.
III. Penalties
A. Introduction
The notices of deficiency issued to petitioners contain the
following explanation for respondent's denial of a charitable
contribution deduction for each petitioner's alleged contribution
of practice intangibles to SMF:
The contribution claimed with respect to * * * [SMF] is
not allowable because it has not been established that
the fair market value of the assets sold exceeded the
sales price received by you or that the intangible
assets donated had any fair market value.
Based upon petitioners' alleged failure to establish that
their intangible assets had any fair market value, respondent
alleges, in his answers to the petitions, that "petitioners are
liable for the accuracy related penalty under [section] 6662(a) in
the amount of 40 [percent] of the deficiency for a gross valuation
misstatement under * * * [section] 6662(h), or in the alternative
are liable for a penalty in the amount 20 [percent] of the
deficiency for a substantial valuation misstatement under * * *
section 6662(e)" (sometimes, the overvaluation penalty). Because
respondent raises the penalty issue in his answers, the issue
constitutes a "new matter" under Rule 142(a), and the burden of
proof with respect to that issue is upon respondent. See Rule
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