Volume 49 — Tax Court Memorandum

Petitioners incurred legal expenses in instituting and pursuing two lawsuits in state court. One lawsuit involved a challenge to petitioners' 50-percent equal ownership in two corporations. Held: in both suits the origin of the claim was to protect, defend, or restore petitioners' interest in property. Thus, the legal expenses must be capitalized.

P claimed deductions for a bad debt loss, expenses for computer research, and miscellaneous expenses for protecting and maintaining property. Held, P failed to meet her burden of proof with respect to any of her claimed deductions.Rule 142(a), Tax Court Rules of Practice and Procedure.

Ps' claimed their share ($15,165) of an advanced royalty payment of $5,025,000 accrued by Boone County Coal Properties (Boone), in which husband-P owned a limited partnership interest. Held: Boone was under a binding obligation prior to October 29, 1976. Accordingly, sec. 1.612-3(b)(3), Income Tax Regs., as effective prior to that date applies.

R determined deficiencies in Ps' Federal income taxes for 1977 and 1979 and an overassessment in 1978 based on a 1981 NOL carryback to 1978. Held: because the determination of a deficiency is a necessary predicate to this Court's jurisdiction, Martz v. Commissioner,77 T.C. 749, 754 (1981), this Court has no jurisdiction over Ps' 1978 tax year, notwithstanding R's failure to act on an Application for Tentative Refund within 90 days.

Held, T reported income from his mortgage brokerage business on the cash method of accounting and therefore is not entitled to accrue a bad debt deduction. Held further, additions to tax for negligence and for failure to timely file returns sustained. Held further, T is liable for self-employment tax.

P claimed a deduction for FICA taxes paid by himself and his wife. P also claimed a deduction for miscellaneous business expenses. P's 1978 Federal income tax return was received after the due date. Held: P may not deduct FICA taxes. Escofil v. Commissioner,464 F.2d 358 (3d Cir. 1972), affg.

Respondent disallowed petitioners' claimed deduction in 1974 of prepaid interest expense incurred in financing purchases of spot silver (a so-called cash and carry tax shelter) on the grounds that… Held: while an interest deduction was no doubt one of petitioner's goals, he did make a profit, leaving tax benefits aside, and he did pay interest. Respondent did not carry his burden of proof that the transactions were shams and not entered into for profit.

Held: Petitioner's activity of gambling on the dog races in Colorado constituted a trade or business and he is entitled to deduct from his winnings… Held: Petitioner's activity of gambling on the dog races in Colorado constituted a trade or business and he is entitled to deduct from his winnings the amounts he bet on the races and his expenses related thereto in arriving at adjusted gross income from that activity. Amounts of profit from gambling on the dog races determined.

Ps created a so-called family trust and transferred their services and assets to such trust. Held: Such trust is not recognized as a separate taxable entity for Federal tax purposes, and Ps are taxable on their income.

Held, traveling expense deduction denied because the expenditures were not made while away from home. Heldfurther, employee business expenses and other business deductions determined. Held: traveling expense deduction denied because the expenditures were not made while away from home. Heldfurther, employee business expenses and other business deductions determined.

Held, petitioner failed to produce positive proof of proper mailing of a missing income tax return. Hence, no presumption of delivery to respondent arises. Held: petitioner failed to produce positive proof of proper mailing of a missing income tax return. Hence, no presumption of delivery to respondent arises.

Held, S underreported gross receipts from his tax return preparation and bookkeeping business in 1976, 1977 and 1978; Held further, S's… Held: S underreported gross receipts from his tax return preparation and bookkeeping business in 1976, 1977 and 1978; Held further, S's claimed depreciation deductions and investment tax credits for 1976, 1977 and 1978 are disallowed in part; Held further, S's claimed automobile expense deductions for 1976, 1977 and 1978 are disallowed in…

Held: Purported sale by controlling shareholders of their stock in one corporation to the other corporation treated as a dividend. Secs. 304, 302, and 301, I.R.C. 1954, applied. Held: Purported sale by controlling shareholders of their stock in one corporation to the other corporation treated as a dividend. Secs. 304, 302, and 301, I.R.C. 1954, applied.

Held: Self-employment income and expenses related to E's forestry consulting business determined; Held further, part of the underpayment of E's Federal income tax for 1975 to 1978, inclusive, was due… Held: Self-employment income and expenses related to E's forestry consulting business determined; Held further, part of the underpayment of E's Federal income tax for 1975 to 1978, inclusive, was due to fraud. Section 6653(b), I.R.C. 1854

Petitioner has totally failed to produce documents and answer interrogatories despite a specific order of this Court directing her to do so. Held, petitioner's failure constitutes a default under the circumstances of this case. Respondent's Motion to Impose Sanctions, seeking a judgment for default under Rule 104(c), Tax Court Rules of Practice and Procedure, is granted.

Petitioners have totally failed to produce documents and answer interrogatories despite a specific order of this Court directing them to do so. Held, petitioners' failure constitutes a default under the cirlcumstances of this case.Respondent's Motion to Impose Sanctions, seeking a judgment for default under Rule 104(c)(3), Tax Court Rules of Practice and Procedure, is granted.

Petitioner, a not-for-profit corporation, engages in various activities to promote health, including the publication of a health care newsletter, sponsorship of a community health fair, arranging for speakers to discuss health-related matters with community groups, and the operation of a medical and dental referral service. Held: Petitioner's operations do not further a substantial commrcial purpose and do not serve private interests. Petitioner is operated exclusively for a charitable purpose and is thus a tax-exempt organization within the meaning of sec. 501(c)(3).

Held, payment by petitioner to his former spouse was in the nature of support and therefore is deductible by petitioner under sec. 215, I.R.C. 1954.

Petitioner-wife suffered from various illnesses. Her physician recommended that she do various daily swimming exercises and that she spend the winter in a warm climate. Held: The lodging expenses were not incurred as a necessary incident to the receipt of medical care. Consequently, the lodging expenses are not deductible as medical expenses under section 213, I.R.C. 1954.

Held, fair market value of an aircraft contributed to charity determined. Held: fair market value of an aircraft contributed to charity determined. Held, further, Ps are liable for the addition to tax under sec. 6651(a), I.R.C. 1954, for failure to timely file their tax returns for 1976 and 1977.

Held, P is liable for the addition to tax for fraud under section 6653(b), I.R.C. 1954. Held: P is liable for the addition to tax for fraud under section 6653(b), I.R.C. 1954.

P-H, former police chief of Green Bay, Wisconsin, sued the City and won a judgment based on claims of denial of equal protection and breach of contract. Held: a genuine issue of material fact remains respecting the issue of whether the $41,000 settlement payment was in lieu of a tort or tort type right or intended as a payment for the contract breach. Accordingly, Ps' Motion for Summary Judgment is denied.

Held: Petitioner was not in the trade or business of teaching in 1976 and the education expenses and other miscellaneous expenses incurred by him are not deductible under sec. 162, I.R.C. 1954. Held: Petitioner was not in the trade or business of teaching in 1976 and the education expenses and other miscellaneous expenses incurred by him are not deductible under sec. 162, I.R.C. 1954.

Held: R.B.S., Inc. a Subchapter S corporation, is not entitled to deductions for depreciation on an item labeled Miscellaneous Equipment on its tax returns for the years 1973, 1974, 1976 and 1977. Held: R.B.S., Inc. a Subchapter S corporation, is not entitled to deductions for depreciation on an item labeled Miscellaneous Equipment on its tax returns for the years 1973, 1974, 1976 and 1977. Petitioners' income as stockholders of R.B.S., Inc. increased accordingly.

Petitioner received $3,064 in Federal Reserve notes as wages, which he failed to include in income. Held, petitioner's receipt of Federal Reserve notes constituted taxable income to him. Held: petitioner's receipt of Federal Reserve notes constituted taxable income to him. Held further, damages are awarded under section 6673, I.R.C. 1954, because petitioner instituted this proceeding primarily for delay.

Petitioner had leased a hotel to a partnership (lessee).In November of 1975 petitioner and the partnership terminated the lease, and petitioner released the partnership from all of its obligations under the lease. As of December 31, 1975, petitioner had accrued, but unpaid, rent receivables due from the partnership. Petitioner also had an accounts receivable account for its other hotel operations. Petitioner used the reserve method to determine its bad debt expense. For the short taxable year ended November 30, 1975, the partnership (lessee) incurred a loss. An additional $20,557 of partnership losses was allocated to petitioner when it was determined that the partners who were entitled to those losses could not utilize them. Petitioner held a 40-percent interest in the partnership. Held, petitioner properly accrued rental income for 1975. Held further, petitioner failed to prove that its rent receivables became worthless and is not entitled to a bad debt deduction. Held further, petitioner was not entitled to the additional partnership losses. Held further, respondent did not abuse his discretion in disallowing part of petitioner's addition to its bad debt reserve.

Held, P underreported gross receipts from his sand and gravel business during 1971 through 1975; Held further, P underreported or failed… Held: P underreported gross receipts from his sand and gravel business during 1971 through 1975; Held further, P underreported or failed to report interest income, rental income and capital gain income in some of the years in issue; Held further, that of the two unexplained deposits in 1974 totaling $100,768.31, $768.31 represents taxable…

Petitioners submitted to the IRS a duly executed power of attorney authorizing the attorney [t]o receive directly, and solely, at his address all notices and communications addressed to the taxpayers. Held: the attorney's address was petitioners' last known address. Held further, the notice of deficiency was valid even though not mailed to petitioners at their last known address. Held further, respondent's Motion for Partial Summary Judgment is granted.

During 1972 and 1973, petitioner received cash and a house from a man to whom she was a companion. The man died in late 1973. Held: The payments received by petitioner in 1972 and 1973 constitute gifts, excludable from income under sec. 102, I.R.C. 1954; the 1975 payment by the estate is includable in income under sec. 61(a)(1), I.R.C. 1954. (2) Liability determined for additions to tax under secs. 6651(a)(1) and 6653(a), I.R.C. 1954.

Held, rental and depreciation deductions denied. Held further, employee business and medical expenses determined. Held further, casualty loss deduction denied. Held: rental and depreciation deductions denied. Held further, employee business and medical expenses determined. Held further, casualty loss deduction denied. Held further, G is liable for the addition to tax for negligence or intentional disregard of rules and regulations under section 6653(a), I.R.C. 1954.

Petitioners' son suffered from various learning disabilities. The son was enrolled in a special education program at a college. Held: The lodging expenses were not incurred as a necessary incident to the receipt of medical care. Consequently, the lodging expenses are not deductible as medical expenses under section 213, I.R.C. 1954.

Held, T's wages are includable in gross income. Held further, the additions to tax for negligence and failure to timely file a return sustained. Held: T's wages are includable in gross income. Held further, the additions to tax for negligence and failure to timely file a return sustained. Held further, T is liable for damages in the amount of $500 under sec. 6673, I.R.C. 1954, for instituting this proceeding primarily for delay.

Held, respondent correctly determined G's gross income for 1977 through 1980. Held further, G is liable for self-employment taxes. Held further, G is liable for the additions to tax for negligence, failure to file an income tax return and underpayment of estimated tax.

Ps claimed losses and an investment tax credit as members of a partnership which acquired and distributed a motion picture film. Held: None of the claimed losses is deductible because the partnership's activities were not engaged in for profit within the meaning of sec. 183, I.R.C. 1954. (2) Because the partnership did not acquire and distribute the film with the intention of making a profit, Ps are not entitled to an investment tax credit under sec. 38, I.R.C. 1954.

Petitioner, a nonresident alien, received compensation and reimbursement of travel expenses from foreign and domestic corporations in connection with a temporary research assignment in the United… Held: petitioner is taxable in the United States on the entire amount of compensation received. Heldfurther, petitioner is entitled to deduct certain substantiated travel and away-from-home expenses.

Respondent mailed a notice of deficiency to petitioner, based upon information obtained from a grand jury proceeding pursuant to an order of an appropriate Federal District Court under Rule 6(e), Fed. Held: Petitioner's motion to suppress, deny presumptive correctness, and shift the burden of going forward with the evidence will be denied. Kluger v. Commissioner,83 T.C. 309 (1984), followed.

Held, unreported income from sole proprietorship determined and additions to tax for fraud sustained. Held: unreported income from sole proprietorship determined and additions to tax for fraud sustained.

P was a limited partner in a partnership formed to exploit a motion picture. Held: R satisfied his burden of establishing that no genuine issue of material fact existed and, therefore, is entitled to a decision as a matter of law.

P is an organization exempt from taxation under sec. 501(c)(3), I.R.C. 1954. P derived unrelated business income from the sale of advertising space in its two magazines and incurred expenses in the telephone solicitation of the advertising and in the publication of the magazines. Held, P has failed to prove that certain expenses which it deducted in calculating its unrelated business taxable income were incurred, or if incurred, were "directly connected with" its unrelated advertising activity within the meaning of sec. 512(a), I.R.C. 1954. However, P is entitled to deduct a portion of its claimed legal and accounting fees and telephone expenses under the rule of Cohan v. Commissioner,39 F.2d 540 (2d Cir. 1930).

Petitioners were limited partners in a partnership which was engaged in the acquisition and exploitation of motion pictures. They claimed their respective shares of losses from partnership operations. Held: none of the claimed losses are deductible because the partnership's activities were not engaged in with the predominant purpose and intention of making a profit.

Ps owned two English corporations, X, which produced motion picture films, and Y, which operated a stud farm. Held: Transfers to Z from X and Y were bona fide loans and are not constructive dividends taxable to Ps. (2) Tranfers of credits from P's account with Y to X to reduce his indebtedness to X constituted income taxable to P.

Petitioner purchased 62 percent of the stock of a subsidiary corporation for $553,062. Petitioner made advances to the subsidary in the amount of $3,420,000. The subsidiary ceased operations. Held: under the facts of the instant case both the amounts paid to acquire the stock of the subsidiary and the advances made to the subsidiary are capital in nature and any loss is a capital loss. Held further, the credit information petitioner seeks to introduce is admissable.

Held: (1) Voluntary establishment of a trust for lifetime benefit of current wife was a taxable gift. Held: Voluntary establishment of a trust for lifetime benefit of current wife was a taxable gift. Trust was not established under a written agreement between husband and wife to discharge husband's obligation to support wife. Sec. 2516, I.R.C. 1954, not applicable.

Petitioner did not include in the gross estate the proceeds of a term life insurance policy on the decedent's life, which was acquired within 3 years of the decedent's death. Held: The decedent did not possess any incident of ownership at death and therefore no part of the proceeds are taxable under section 2042, I.R.C., 1954.

P has totally failed to produce documents and answer interrogatories despite a specific order and an oral direction of this Court directing him to do so. Held, P's failure constitutes a default under the circumstances of this case.R's Motion to Impose Sanctions, seeking, interalia, a judgment for default under Rule 104(c)(3), Tax Court Rules of Practice and Procedure, is granted.

Ps claimed losses and investment tax credits arising from their investments in master recordings. Held: None of the claimed losses is deductible because Ps' activities were not engaged in for profit within the meaning of sec. 183, I.R.C. 1954. (2) Because Ps did not acquire or have the master recordings distributed with the intention of making a profit, Ps are not entitled to investment tax credits under sec. 38, I.R.C. 1954.

Petitioner has totally failed to produce documents and answer interrogatories despite a specific order of this Court directing him to do so. Held: petitioner's failure constitutes a default under the circumstances of this case. Respondent's Motion to Impose Sanctions, seeking a judgment for default under Rule 104(c), Tax Court Rules of Practice and Procedure, is granted.

Held: (1) H and W failed to disprove the Commissioner's determination of unreported income in each of the years 1975 through 1978. Held: H and W failed to disprove the Commissioner's determination of unreported income in each of the years 1975 through 1978. (2) H and W are liable for the addition to tax for fraud under sec. 6653(b), I.R.C. 1954, for each of the years 1975 through 1978.

Held: Wages and compensation received by petitioner as an employee are includable in his gross income and are subject to the payment of Federal income tax thereon. Held: Wages and compensation received by petitioner as an employee are includable in his gross income and are subject to the payment of Federal income tax thereon.

Petitioner, Dr. Vuitch, made two deposits totaling $190,750 to an individual bank account. Held, these bank deposits constitute income to petitioners. Held: these bank deposits constitute income to petitioners. Held further, petitioners are liable for the addition to tax under sec. 6653(a), I.R.C. 1954.

Held, R's Motion to Dismiss Petition for Failure to State a Claim Upon Which Relief Can be Granted is granted. Held: R's Motion to Dismiss Petition for Failure to State a Claim Upon Which Relief Can be Granted is granted. Held further, the Court, suasponte, awards damages to the United States in the amount of $5,000 since P instituted and maintained this proceeding primarily for delay and his position herein is groundless. Sec. 6673, I.R.C. 1954.

For the calendar year 1972 respondent charged petitioner George Gordon Liddy with the receipt of $374,300 from various persons and the Finance Committee to Re-Elect the President. Respondent also determined that of that amount, $197,500 was disbursed by Liddy in furtherance of certain domestic intelligence operations which terminated with the so-called "Watergate" break-in, and that the balance of $176,800 was taxable income to him. Respondent further determined that all or part of the resultant underpayment of tax for the year 1972 was due to fraud. Held, petitioner's testimony established that he received funds totaling $386,000 and that he disbursed $340,370 of that amount in furtherance of his intelligence operations. Petitioner failed to carry his burden with respect to the disbursement of the remaining $45,630, and consequently he is deemed to have income in that amount. Held further, Mrs. Liddy qualifies as an innocent spouse within the meaning of sec. 6013, I.R. C. 1954, and consequently is relieved of any liability attributable to the foregoing inclusion in income. Held further, respondent failed to carry his burden of proof that the omission of said income was due to fraudulent intent.

During 1980, P, a driver for United Parcel Service, received compensation in the amount of $28,061.33. In March, 1980, P paid $3,300 to join the Life Science Church. Held: P is not entitled to a theft loss deduction in 1980 for amounts paid to the Life Science Church. Held further, P is liable for the addition to tax for negligence or intentional disregard of rules and regulations under section 6653(a), I.R.C. 1954.

Petitioner-fireman was required to eat his meals at the station house while on 24-hour duty. Held: petitioner may not deduct amounts paid for his share of common mess expenses or for the house fund under section 162 nor may such amounts be excluded from income under section 119. Held further, cash partial reimbursement for meals is includable in petitioner's gross income.

Ps were the sole shareholders of KPLS, Inc., a corporation formed to operate a radio station. Held: R's determination of interest income and capital gain received by Ps pursuant to the installment note during the years in issue sustained; Held further, Ps are not entitled to a 1976 business expense deduction in excess of the amount allowed by R; Held further, R's useful life determination for certain rental property held by Ps…

Property taxes on real property owned by an unrelated corporation and paid by petitioner, an individual, were not imposed upon petitioner and are not deductible by him under section 164(a), I.R.C. 1954.

Held, fact that R did not follow reopening procedures of Rev. Proc. 81-35, 1981-2 C.B. 588, after sending Ps a no change letter does not affect the validity of the notice of deficiency. Held: fact that R did not follow reopening procedures of Rev. Proc. 81-35, 1981-2 C.B. 588, after sending Ps a no change letter does not affect the validity of the notice of deficiency.

Petitioner filed an altered Form 1040 on which he categorizes his wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Petitioner filed an altered Form 1040 on which he categorizes his wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Petitioner filed an altered Form 1040 on which he categorizes his wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Petitioner filed an altered Form 1040 on which he categorizes his wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Held: Petitioner's employment as a steamfitter-welder assignee was indefinite and thus, a deduction for expenses to travel to and from work incurred during 1980 and 1981 is not allowable under section 162(a)(2).

Petitioner filed an altered Form 1040 on which he categorizes his wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Petitioner filed an altered Form 1040 on which he categorizes his wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Petitioner filed an altered Form 1040 on which she categorizes her wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Respondent filed a Motion to Impose Sanctions against petitioners for failure to comply with a Court order requiring them to respond to certain discovery requests. Held: respondent's motion is granted, and this case is dismissed or failure properly to prosecute. Rules 104(c)(3) and 123(a) and (b), Tax Court Rules of Practice and Procedure.Held further, damages are awarded under sec. 6673, I.R.C. 1954, because petitioners instituted this proceeding primarily for delay.

Petitioner filed an altered Form 1040 on which he categorizes his wages as "Non-taxable receipts." Held, wages are subject to tax and damages are awarded to the United States.

Petitioner filed an altered Form 1040 on which he categorizes has wages as Non-taxable receipts. Held: wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Amount of tip income received in 1978 by cocktail waitresses serving complimentary drinks on the casino floor of Resorts International Hotel and Casino in Atlantic City, New Jersey, determined.

Petitioner filed an altered Form 1040 on which he categorizes his wages as "Non-taxable receipts." Held, wages are subject to tax; the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Ps were consumer finance corporations. The Commissioner redetermined Ps' allowable additions to their reserves for bad debts by use of the Black Motor formula. Held: Ps failed to prove that the Commissioner's determination of the allowable additions to their reserves was unreasonable.

Held, respondent's determination that petitioner is liable for the addition to tax under sec. 6653(b), I.R.C. 1954, sustained. Held: respondent's determination that petitioner is liable for the addition to tax under sec. 6653(b), I.R.C. 1954, sustained.

A, a partnership, purchased the leased fee interest in a shopping center. Held, the proper allocation of A's cost basis in the shopping center between land and depreciable improvements in determined. Held: the proper allocation of A's cost basis in the shopping center between land and depreciable improvements in determined.

The executor elected under sec. 6166, I.R.C. 1954, to defer payment of Federal estate tax and claimed on the decedent's Federal estate tax return an estimate of the interest to be accrued over the… Held: the executor may not claim, as a matter of law, an administration expense deduction pursuant to sec. 2053(a)(2) because amount of interest is not determinable with sufficient certainty and there is no assurance that the prospective accrual of interest will ever be paid.

Ps have totally failed to produce documents and answer interrogatories despite a specific order of this Court directing them to do so. Held: Ps' failure constitutes a default under the circumstances of this case. R's Motion to Impose Sanctions, seeking a judgment for default under Rule 104(c)(3), Tax Court Rules of Practice and Procedure, is granted.

Held. respondent's determination that petitioner is liable for the addition to tax under sec. 6653(b), I.R.C. 1954, sustained.

Held, because petitioner did not carry his burden of proving that the Universal Life Church that he organized was operated exclusively… Held: because petitioner did not carry his burden of proving that the Universal Life Church that he organized was operated exclusively for religious purposes and that no part of the church's net earnings inured to the benefit of any private individual, petitioner is not entitled to deductions for contributions made to that organization in…

Petitioner-husbands are doctors, who operated their medical practice through a partnership. Held: The trusts were devoid of economic reality and are not recognizable for Federal income tax purposes. (2) Petitioners are liable for additions to tax under section 6653(a), I.R.C. 1954.

Held, on the facts presented, P is not entitled to deduct under sec. 162, I.R.C. 1954, dues to a Mardi Gras carnival club. Held: on the facts presented, P is not entitled to deduct under sec. 162, I.R.C. 1954, dues to a Mardi Gras carnival club.

Held: Income averaging cannot be used in computing alternative minimum tax under section 55, IRC, as in effect during 1980.

Held: (1) Respondent's Motion for Summary Judgment and Imposition of Damages Under I.R.C. § 6673 is granted; (2) petitioners are not… Held: Respondent's Motion for Summary Judgment and Imposition of Damages Under I.R.C. § 6673 is granted; (2) petitioners are not entitled to deductions claimed on their 1979, 1980 and 1981 returns for charitable contributions to the Universal Life Church; (3) petitioners are liable for additions to tax pursuant to I.R.C. § 6653(a); and (4)…

Held, because petitioner failed to carry his burden of proving that certain charitable contributions allegedly made to the Glenelg… Held: because petitioner failed to carry his burden of proving that certain charitable contributions allegedly made to the Glenelg Church of Divine Blessings were actually made to an organization organized and operated exclusively for religious purposes, no part of the net earnings of which inured to the benefit of any private individual,…

P, in a correctly addressed envelope, timely mailed a petition to the Tax Court. The envelope was returned to P marked insufficient postage by the U.S. Postal Service. Held: petition not timely filed, this Court lacks jurisdiction and R's Motion to Dismiss is granted.

Held, R's Motion for Judgment on the Pleadings is granted. Held further, R's Motion to Award Damages Under I.R.C. Sec. 6673 is granted and damages are awarded to the United States in the amount of $5,000 since P instituted and maintained this proceeding primarily for delay and his position herein is groundless and frivolous.

Petitioners, limited partners in a partnership purportedly engaged in the acquisition and distribution of motion pictures, deducted their shares of partnership losses and claimed their shares of investment credits on partnership films. Held, partnership activities were not engaged in for profit and under sec. 183(b) petitioners are not entitled to deductions for their share of expenses under sec. 162(a) or sec. 212(1) and (2) or depreciation under sec. 167(a) or investment credit under sec. 38. Held,further, nonrecourse notes given in part payment of films were not genuine indebtedness and petitioners are not entitled to deduction for interest paid thereon under secs. 163(a) and 183(b).

In 1981, Ps allegedly operated a local congregation of the Universal Life Church of Modesto, Calif. Ps allege that they made contributions to such local congregation and claimed a deduction therefor. Held: Ps failed to prove that their local congregation existed, or that such local congregation qualified as a tax-exempt organization, or that no part of the net earnings of such local congregation inured to their personal benefit.

In 1981, P allegedly operated a local congregation of the Universal Life Church of Modesto, Calif. P alleges that he made contributions to such local congregation and claimed a deduction therefor. Held: P failed to prove that his local congregation existed, or that such local congregation qualified as a tax-exempt organization, or that no part of the net earnings of such local congregation inured to his personal benefit.

In 1981, Ps allegedly operated a local congregation of the Universal Life Church of Modesto, Calif. Ps allege that they made contributions to such local congregation and claimed a deduction therefor. Held: Ps failed to prove that their local congregation existed, or that such local congregation qualified as a tax-exempt organization, or that no part of the net earnings of such local congregation inured to their personal benefit.

Held, petitioner is an innocent spouse within the meaning of sec. 6013(e), I.R.C. 1954, and is therefore relieved from liability for the deficiencies in income taxes for the years in issue. Held: petitioner is an innocent spouse within the meaning of sec. 6013(e), I.R.C. 1954, and is therefore relieved from liability for the deficiencies in income taxes for the years in issue.

Held, fair market value of gemstones contributed to charity determined. Held: fair market value of gemstones contributed to charity determined.

A determination of tax was made and assessed for the taxable year January 1, 1984, through January 22, 1984, under the provisions of sections 6851 and 6867 where unidentified cash in the amount of… Held: The termination of assessment of income tax under section 6851 is not a statutory notice of deficiency within the meaning of section 6212 and this Court does not have jurisdiction.

Held, M filed a joint Federal income tax return for taxable year 1980. Miscellaneous omissions from gross income determined. Held: M filed a joint Federal income tax return for taxable year 1980. Miscellaneous omissions from gross income determined. Held further, M is not relieved of liability for the deficiency under the innocent spouse provisions of sec. 6013(e), I.R.C.

Held: (1) The statutory notice of deficiency was not issued arbitrarily; (2) petitioner failed to carry her burden of proving any error in respondent's deficiency determination; (3) section 66(c), I.R.C. 1954, as amended, does not relieve petitioner of tax liability on unreported community income and (4) petitioner is liable for additions to tax under sections 6651(a) and 6653(a), I.R.C. 1954.

Held: Petitioners' Motion for Further Trial is denied as untimely. Petitioners may not raise a new issue in the context of Rule 155 computations. Held: Petitioners' Motion for Further Trial is denied as untimely. Petitioners may not raise a new issue in the context of Rule 155 computations.

Petitioner filed an altered Form 1040 on which he categorizes his wages as "Non-taxable receipts." Petitioner concedes wages are subject to tax. Held, the tampered form was not a return; additions to tax are found; and damages are awarded to the United States.

Petitioner-husband accrued vested benefits in his employer's noncontributory tax-qualified pension plan until June 30, 1976. Held: Petitioner-husband was an active participant in a tax-qualified pension plan for part of 1976. Consequently, the IRA contribution is not deductible. Sec. 219(b)(2)(A)(i), I.R.C. 1954, as then in effect. (2) The 6-percent excise tax on excess contributions to an IRA under section 4973(a) applies.