Family on Hook for Not Reporting $3 Million From Jewelry Sale

The IRS properly imposed penalties against six members of a family who underreported income earned from their jewelry kiosks in a California mall, the US Tax Court said Wednesday.

The opinion covers five separate petitions filed by six members of the Sehati family, which the court determined didn’t report $3 million in proceeds from the sale of jewelry they say was gifted to them. Judge L. Paige Marvel also sided with the IRS on several other issues, including that several family members failed to substantiate net operating loss carryforward deductions for several tax years. Two of them also failed to ...