Case: Petitioners Bound by Stipulated Adjustment to Income, IRS’s Deficiency Determination Upheld (11th Cir.)

Petitioners were bound by a stipulation agreed to at trial that income reported on 2013 Form 1040, Schedule E, should be increased by $1 million, and failed to justify overruling the Tax Court’s deficiency and penalty determinations under Rule 155, the U.S. Court of Appeals for the 11th Circuit held, affirming the lower court’s decision. The IRS’s deficiency determination for the 2013 tax year was based, in part, on a $1.3 million upward adjustment to income reported on Schedule E from Petitioners’ S corporation, resulting from the disallowance of deductions claimed by the corporation. On appeal, Petitioners contended the stipulation ...