Professional Documents
Culture Documents
__________________
__________________
Per Curiam.
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Court finds
Kenneth
its
origin in
and Phyllis
dispute between
Hanley, and
the Internal
entitled to
a tax refund of
(allowing
deductions for
appellants,
Revenue Service,
In
April 1987,
they were
year.
The
the
of the Tax
"worthless."
business
See 26 U.S.C.
___
debts that
166(a)
become worthless
prepared a
substitute
left
return and
An IRS
calculated that
the
it made the
____________________
IRS levied on
In
January 1990,
deficiency for
tax year
Hanleys petitioned
deficiency.
1986
the Tax
issued a
in the
statutory notice
amount of
Court for
$1,217.2
a redetermination
of
The
of the
the IRS
of
Internal
Revenue
Code
by levying
confiscating their
the
stated in
$1,217 figure
the notice
on
and
of deficiency
was, in
By the time the matter came to trial in the Tax Court, the
parties had
the Tax Court to determine only whether the Hanleys were entitled
to
take
deduction for
the
allegedly
worthless
debt.
In
addition, at the beginning of the trial, Mr. Hanley asked the Tax
Court to eliminate
that portion
of the
amended petition
which
his
daughter
testified
at
the
trial,
confining
their
____________________
Notice of Deficiency in the amount of $1,824.00. . . ."
from the
their
bench.
burden
He found
of
proving
At
failed to carry
that
worthless,
the
debt
instructed the
155, in
light of
was
and
deficiency, pursuant to
this finding
and the
various
government
Hanleys
disputed
recalculated the
this
figure,
that they
deficiency to
and
submitted
were entitled to
be $524.
their
own
a refund
of
three months
later,
on September
23, 1991,
the
1991."
The Tax
Court identified
See
___
filed within
(motions to vacate or
thirty days of
entry of
revise
decision).
The
The government
says that
we should dismiss
the appeal
for
26 U.S.C.
for business debts that become worthless during the taxable year.
In
order to
qualify for
that deduction,
Rule
petitioner");
to
deductions").
("The burden
sometime in
of
proof
1986.
shall
and
See
___
Tax
be upon
the
bore the
the Hanleys
show
that
he
The government
was
did
entitled
not
the
claimed
seriously dispute
the
existence
their
daughter,
Geraldine,
total
of
$29,550
to
start
____________________
business.
The
government contended,
and the
Tax Court
found,
however, that
become worthless at
any time in
1986.
Cole v.
____
Commissioner of
_______________
Internal Revenue, 871 F.2d 64, 66 (7th Cir. 1989) and cases cited
________________
therein.
We may therefore
for "clear
error."
See
___
v. Commissioner of Internal
__________________________
erroneous
evidence is left
mistake
when
"the
with the
has been
reviewing
A finding of fact is
court
committed."
United States
_____________
on
the
entire
conviction that
v. United States
______________
"Proof of worthlessness
at 67 (citing Estate of Mann, 731 F.2d 267, 276 (5th Cir. 1984)).
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The
Hanleys point,
we take
it, to
the failure
of Geraldine's
The
Tax
event did
not demonstrate that the debt had become valueless before the end
___
of the year.
First, the
the Tax Court to find that, at the close of 1986, the Hanleys had
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"repossessed,"
and
business
the sale
partial
repayment.
still held,
of
certain
which might
In fact,
assets
have
of Geraldine's
resulted in
Mr. Hanley
at
did later
least
sell these
promised to
failed.
have
the debt
whether
of the
her
event.
debt.
business
It
contains
no
Rather, the
of repayment only
or not
evidence
at
all
concerning
she
Hanleys might
if
repay
And,
debt, the
the
deficiency,
recomputation,
for
clear
and
to
error.
Again,
we
the
Hanleys'
of fact which
can find
no
competing
we review only
such
error.
The
two permissible
views of
factfinder's choice
DesRosiers v. Moran,
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_____
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949 F.2d
15, 19 (1st
Cir. 1991)
(quoting Anderson
________
v. City of
________
IRS deprived
them of due
statutes regulating
the
process of law
procedures
by violating
for assessing
and
procedural claim in
the first
paragraph of
a similarly
the amended
claim, and
claim in
his decision.
Whatever
abridging
his
Mr.
Hanley's
petition in
motivation
might have
this fashion,
on
been
the basis
for
of the
record this court can conclude only that the procedural claim was
withdrawn
from
therefore
case,
we have no
reviewing
the
before
decision.
trial,
and
claim's merits.
"[I]n
Court's attention
is to consider whether
was
Tax
the subject
the
Tax Court
proceeding
Plainly,
issue that
.
. .
."
-8-
Affirmed.
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