FUDIM v. COMMISSIONER
Download the complete brief here: T.C. Memo. 1994-235
UNITED STATES TAX COURT
EFREM V. FUDIM and MARGARITA L. FUDIM, Petitioners
v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 10309-91.
Filed May 26, 1994.
[Code Sec. 41]
Research and experimental expenditures: Credit: Qualified services. – Research credits claimed by married engineers were permitted for years in which they both spent over 80-percent of their time engaged in qualified services. Both were highly trained engineers whose work during the years at issue produced two patents. The record contained contemporaneous letters and scientific articles acknowledging their work. However, since the engineers did not present records detailing the amount of time spent and the activities in which they were engaged, the time that they spent on research and development was estimated by the Court under the Cohan principles. No research credits were allowed based on the work allegedly engaged in by their daughter due to lack of evidence.
[Code Sec. 280A]
Rental property: Personal use; Dwelling unit; Definition. – A married couple was denied losses claimed in connection with time-share condominiums in which they held an interest. Althought the couple did not occupy any of the condominiums during the years at issue, they failed to show that the units were not occupied by any individuals who held an interest in the units during those years. Further, no evidence supported their claim that the condominiums could be excepted from the definition of a dwelling unit because of their exclusive use as a hotel, motel, inn or similar establishment.
[Code Sec. 6213]
Returns: Deficiency notices: Mathematical errors. – A deficiency notice was not required to be issued prior to an assessment of tax where the liability resulted from a mathematical or clerical error occurring on a jointly filed tax return. Consequently, the IRS was not barred from assessing the tax, which resulted from a couple’s failure to apply a limitation to a claimed research credit. Moreover, no restrictions on assessments were violated when the IRS applied the refunds owed to the couple for subsequent years against the liability.
[Code Sec. 6501]
Statute of limitations: Waivers: Termination of waivers. – The IRS’s acceptance of an examining agent’s report did not terminate an agreement to extend the limitations period which had been executed by a married couple and the IRS. Except for the agreement’s expiration date, which had not been reached, the extension agreement could be terminated only by an assessment of tax. Further, the acceptance of the examining agent’s report by both parties did not constitute either a final determination of tax liabilities or a closing agreement. Finally, language contained in an IRS publication relating to extension periods did nto estop the IRS from issuing the deficiency notice.
[Code Sec. 7605]
Examination of books: Additional inspection: Authorization of. – the IRS did not improperly conduct a second inspection of the tax records of a married couple where they refused to produce their books and records in response to notification that their case was being reopened. As a result, no second insprection occurred. Further, the IRS did not seek to reopen the case fro frivolous reasons, and the couple was not subject to harassment or discrimination at the hands of the IRS.
Efrem V. Fudim, pro se.
Mark J. Miller, for the respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
FINDINGS OF FACT
Research and Development Activities
Time Share Condominiums
Procedural Matters
OPINION
Procedural Issues
Statute of Limitations
Burden of Proof
Assessment of 1988 Taxes
Other Procedural Matters
Substantive Issues
Losses on Time Share Condominiums
Research Credit
Download the complete brief here: Fudim_v_Commissioner (apologies for the poor copy quality)
