DocketNumber: Docket No. 30874-81.
Citation Numbers: 45 T.C.M. 514, 1983 Tax Ct. Memo LEXIS 766, 1983 T.C. Memo. 23
Filed Date: 1/13/1983
Status: Non-Precedential
Modified Date: 11/21/2020
MEMORANDUM OPINION
DAWSON,
Addition to Tax | ||
Year | Deficiency | Sec. 6653(a) 1 |
1978 | $2,267.00 | $113.35 |
1979 | 2,944.00 | 147.20 |
At issue are (1) whether petitioners are entitled to claimed Schedule C business expense deductions and various itemized deductions1983 Tax Ct. Memo LEXIS 766">*767 in excess of the zero bracket amount; and (2) whether they are liable for the additions to tax under section 6653(a).
Petitioners were residents of Thrall, Texas, at the time they filed their petition herein. They timely filed joint Federal income tax returns for the years 1978 and 1979. Such returns were prepared by James M. Damon of Austin, Texas, who was convicted on April 28, 1981, in the United States District Court for the Western District of Texas, Austin Division, of preparing false and fraudulent returns in violation of section 7206(2) of the Code. Mr. Damon would have taxpayers, who were wage earners, report self-employment business income and deductions on Schedule C of Form 1040 incorrectly reflecting substantial business losses.
In 1978 and 1979 James R. Hollie was employed by Aluminum Company of America. In 1978 Carrie Hollie was employed by Austin State School. Neither petitioner was self-employed during the years in issue. The deductions claimed by petitioners on Schedule C of their Form 1040 for each year and the itemized deductions in excess of the zero bracket amount were disallowed by respondent in his notice of deficiency.
On September 22, 1982, respondent1983 Tax Ct. Memo LEXIS 766">*768 served on petitioners a Request for Admissions pursuant to Rule 90. 2 Paragraphs 6 and 8 through 11 of the request for admissions read as follows:
6. Petitioners are entitled to no business expense deductions in 1978 and 1979.
8. Petitioners are entitled to no itemized deductions in 1978 and 1979 in excess of those allowed in the Notice.
9. Petitioners received unreported, taxable interest income in 1979 from Rockdale Works Credit Union, as set forth in the Notice.
10. Petitioners are entitled to no residential energy credit in 1978 and 1979 in excess of that allowed in the Notice.
11. Petitioners incorrectly report W-2 income received in 1979 as $29,100.00, rather than $29,700.00 as determined by the respondent in the Notice.
Petitioners have not answered any of the admissions set forth above. Therefore, pursuant to Rule 90(c) and (e), each matter contained in respondent's request is deemed admitted for the purposes of this case.
When this case was called for1983 Tax Ct. Memo LEXIS 766">*769 trial at San Antonio on December 6, 1982, the petitioners offered no evidence in support of the assignments of error raised in their petition. Instead, they filed a memorandum which asserted their positions, as follows:
1. Petitioners rely upon the 1976 Tax Reform Act and
2. Petitioners rely on the good faith of Boyd in the case of Boyd v. United States, Supreme Court decided on Feb. 1, 1886. The Supreme Court stated that the government cannot use records it obtains under any kind of threat or duress in order to recompute the tax either on the basis of the information thus obtained or because it is not surrendered.
3. Petitioners rely upon the
4.Petitioners ask that court Respondent show cause why each and every deduction disallowed, should not be allowed.
There is no evidence1983 Tax Ct. Memo LEXIS 766">*770 in this record as to any violation of
We reject petitioners'
Petitioners have the burden of proving that respondent's determination in regard to the deficiencies and additions to tax is incorrect. 1983 Tax Ct. Memo LEXIS 766">*772
1. All section references are to the Internal Revenue Code of 1954, as amended and in effect for the years in issue, unless otherwise indicated.↩
2. All rule references are to the Tax Court Rules of Practice and Procedure.↩
3. After this case was submitted the petitioners filed a motion for an in-camera review of their records by the Court in their effort to justify the assertion of their
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