Frank H. and Marla C. Black, (2007)

Docket Number: 15629-04

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Frank H. and Marla C. Black, (2007)

T.C. Memo. 2007-364

UNITED STATES TAX COURT FRANK H. AND MARLA C. BLACK, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 15629-04. Filed December 10, 2007.

Frank H. and Marla C. Black, pro se. J. Craig Young, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION WELLS, Judge: Respondent determined the following deficiencies in income tax and penalties for petitioners' 1991 and 1992 taxable years:

Frank H. Black Year Deficiency Penalty sec. 6662(a) Penalty sec. 6663 1991 $22,904 n/a $17,178.00 1992 60,262 n/a 45,196.50

Marla C. Black Year Deficiency Penalty sec. 6662(a) Penalty sec. 6663 1991 $22,904 $4,580.80 n/a 1992 60,262 12,052.40 n/a After concessions, the issues we must decide are: (1) Whether petitioner Frank Black is liable for the fraud penalty pursuant to section 66631 for taxable years 1991 and 1992; (2) whether assessment of the deficiencies in income tax and penalties for the taxable years 1991 and 1992 is barred by the statute of limitations; (3) whether petitioners failed to report income of $107,082 and $160,706, respectively, on their 1991 and 1992 joint income tax returns; (4) whether petitioners have substantiated the existence or amounts of any net operating losses for the taxable years 1991 and 1992; (5) whether petitioners have substantiated that they are entitled to capital loss carryover deductions for the taxable years 1991 and 1992 of $3,000 for each year; (6) whether petitioners failed to report interest and dividend income on their 1992 joint return of $3,748 and $35, respectively; and (7) whether petitioner Marla Black is liable for a penalty pursuant to section 6662(a).

FINDINGS OF FACT Some of the facts and certain exhibits have been stipulated. The parties' stipulations of fact are incorporated herein by reference and are found as facts. Petitioners resided in Rock Hill, South Carolina, at the time the petition was filed.

Petitioners are Frank H. Black (Mr. Black) and Marla C. Black (Mrs. Black). Petitioners were married throughout all relevant periods.

Mr. Black graduated from Michigan State University in 1969 with a Bachelor of Science degree, majoring in sociology and minoring in religion. He was self-employed during 1991 and 1992 as a licensed stockbroker, investment consultant, and insurance agent.

On July 1, 1990, Mr. Black started his own business, Frank Black d/b/a Robert Thomas Securities, which continued to operate throughout 1991 and 1992. On May 18, 1992, Mr. Black formed a North Carolina 'C-Corporation', Frank Black, Inc. Respondent has not conducted an examination of Fran...

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