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When assets are subject to the taxpayer’s unfettered command and so they’re free to love them since they see fit, the taxpayer is considered to own constructively obtained such belongings.
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On audit of the McNultys’ returns, the IRS issued notices of deficiency, deciding that Donna acquired a taxable distribution from her IRA that she failed to report. The auditor also decided the McNultys will be answerable for accuracy-similar penalties.
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