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Respondent determined a deficiency in petitioners’ 2003
Federal income tax of $4,675. The only issue we must decide is
whether petitioners received income of $18,171 as a result of the
lapse of a life insurance policy.2
Background
Some of the facts have been stipulated and are so found.
The parties’ oral stipulation of facts and exhibits is
incorporated by this reference. When the petition was filed,
petitioners resided in Florida.
Joseph Dyer (petitioner) was a partner in the law firm of
Siciliano, Ellis, Sheridan, & Dyer (law firm or firm) in 1978.
On May 12, 1978, the firm purchased a life insurance policy
(insurance policy or policy) with petitioner as the insured and
his wife, petitioner Mary Dyer, named as the beneficiary. The
firm’s partners, including petitioner, had an oral agreement to
insure each of the partners so that, in case one of the partners
died, the proceeds from the insurance covering that partner would
2 In their petition, petitioners claim that respondent is
barred by the statute of limitations from assessing a deficiency
against them for 2003. In respondent’s answer, he alleged that
petitioners’ 2003 Federal income tax return was filed on Oct. 14,
2004, and that the notice of deficiency was timely sent to
petitioners by certified mail on July 10, 2006, before the
expiration of the 3-year period for assessment applicable under
sec. 6501(a). Petitioners did not argue this issue at trial.
Accordingly, we find that petitioners conceded the issue, and
respondent timely sent the notice of deficiency in accordance
with the requirements of sec. 6501(a).
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Last modified: March 27, 2008