Slip opinions decided 2001 — Tax Court Memorandum

D, a consultant, carried on his consulting business as an employee of P, a C corporation. Held: The notice of deficiency is valid. 2. HELD, FURTHER, R's disallowance of various deductions is sustained in substantial part. 3. HELD, FURTHER, R's penalty against P for the taxable year is sustained, in part, under sec. 6662, I.R.C.

P deducted amounts for alimony paid and an additional personal exemption. P omitted from income a distribution from the trustee of an employee plan. 1. Held: P has shown his entitlement to only a portion of the alimony deduction taken. 2. HELD, FURTHER, P has not shown his entitlement to the additional personal exemption. 3. HELD, FURTHER, P must include in income the distribution from the trustee.

P's counsel deposited an envelope containing P's petition with FedEx on the 87th day after R mailed the notice of deficiency. The envelope bore the correct name, address, and ZIP code for this Court. Held: the envelope was properly addressed as required by sec. 7502(a)(2)(B), I.R.C. 2. HELD, FURTHER, P's petition was timely filed because it was timely sent. See sec. 7502(a), (f), I.R.C. Thus, we will deny R's motion to dismiss for lack of jurisdiction.

Ps worked as blackjack and roulette dealers, and P-H worked as a pit boss, at a casino in Prince George's County, Maryland. The casino recorded on daily time sheets the number of hours Ps worked. Held: Ps are liable for additions to tax for civil fraud for 1991 and 1992. See sec. 6663, I.R.C. 1986. 2. HELD, FURTHER, Ps are liable for an addition to tax for negligence for 1993. See sec. 6662(a), I.R.C. 1986. 3. HELD, FURTHER, amounts of deficiencies redetermined.

P and H filed a joint return for 1986. R determined a deficiency in tax on account of omission of embezzlement income and gain from… Held: P and H omitted from income embezzlement income and gain (in a reduced amount) of H. 2. HELD, FURTHER, P has failed to show error in the determination of sec. 6661, I.R.C., addition to tax for substantial understatement of income. 3. HELD, FURTHER, P has failed to show entitlement to relief from liability under sec. 6015, I.R.C.

R attributed to P1 and P2, both joint return filers, various items with respect to certain trusts, P3, P4, P5, and P6, on the grounds that such trusts were either shams or grantor trusts, or on the… Held: Deficiencies and accuracy-related penalty with respect to P3, P4, and P5 sustained, subject to concession by R. 2. HELD, FURTHER, P6 has failed to establish that there is a proper party before the Court; we shall dismiss with respect to P6 for lack of jurisdiction. 3.

Kenneth M. Hart, for applicants.

R attributed to H and W gross receipts and interest with respect to a trust, on the grounds that the trust was either a sham or a grantor trust,… Held: Trust income is attributed to H and W for the reasons stated by R. 2. HELD, FURTHER, H and W omitted nontrust income and overstated deductions. 3. HELD, FURTHER, H and W are liable for the accuracy- related penalty under sec. 6662(a), I.R.C. 4. HELD, FURTHER, R's motion to dismiss for lack of jurisdiction will be granted. 5.

P paid the investment banking firm of Goldman, Sachs & Co. (G) approximately $ 17.5 million to advise it financially on a recapitalization. Held: P is collaterally estopped from claiming that it sustained a theft loss by virtue of the additional cash payment of $ 217,649,340.

P and I filed a joint 1995 Federal income tax return. Held: P has failed to establish his entitlement to relief from joint and several liability pursuant to either subsec. (b) or subsec. (c) of sec. 6015, I.R.C. Mufthiha Sabaratnam , for intervenor.