                        T.C. Memo. 2005-37



                      UNITED STATES TAX COURT



          FARAMARZ AND MITRA ELGHANIAN, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

                FARAMARZ ELGHANIAN, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 254-03, 256-03.1         Filed February 28, 2005.



     Howard S. Fisher, for petitioners.

     Jack H. Klinghoffer and Gerard Mackey, for respondent.


             MEMORANDUM FINDINGS OF FACT AND OPINION


     COLVIN, Judge:   Respondent determined deficiencies in

petitioners’ Federal income tax and an addition to tax and a

penalty as follows:


     1
        These cases were consolidated for trial, briefing, and
opinion.
                                     - 2 -

                         Faramarz Elghanian

                                   Addition to Tax and Penalty
     Year       Deficiency    Sec. 6661, I.R.C. Sec. 6662(a), I.R.C.
     1987         $1,867
     1988        186,159               $46,540
     1989        219,622                              $43,924

                    Faramarz and Mitra Elghanian

                             Year     Deficiency
                              1990       3,949
                              1991       3,949

     The issues for decision are:

     1.     Whether petitioner’s2 loss on the expropriation of his

family’s Iranian property occurred in 1979, as respondent

contends, or in 1986, as petitioners contend.      We hold that it

occurred in 1979.

     2.     Whether petitioner was a resident of the United States

in 1979.    We hold that he was not.

     3.     Whether petitioner is entitled to a settlement of his

claimed deduction for expropriation losses on the same terms as

respondent’s settlement with petitioner’s father and brother.        We

hold that he is not.

     4.     Whether petitioner is liable for the addition to tax

under section 6661(a)3 for 1988 and the accuracy-related penalty




     2
          References to petitioner are to Faramarz Elghanian.
     3
        Section references are to the Internal Revenue Code as
amended and in effect in the years in issue. Rule references are
to the Tax Court Rules of Practice and Procedure.
                                     - 3 -

under section 6662(a) for 1989 for substantial understatement of

tax.       We hold that he is not.

                             FINDINGS OF FACT

       Some of the facts have been stipulated and are so found.

A.     Petitioners

       Petitioners were married and resided in France when they

filed their petition.4

       1.      Petitioner’s Family and Early Years

       Petitioner was born in Iran in 1950 or 1951.     Petitioner’s

father and several of his father’s brothers owned businesses in

Iran which had 5,000-8,000 employees in the 1970s.

       Petitioner’s father was born in Iran.     His mother was born

in London.       Petitioner attended school in Iran from 1957 to May

1965.       Petitioner never worked for his family’s businesses in

Iran.

       Petitioner applied for an alien registration receipt card

(green card)5 in 1965 when he was about 14 years old.      In his

       4
        Petitioner testified that he and his wife resided in
France beginning before Sept. 11, 2001, and continuing through
the date of trial. Petitioners stated in the petition that their
mailing address was c/o Steven E. Golden, C.P.A., in New York,
New York. There is no evidence that they resided in New York
when they filed the petition.
       5
       "Green card" is the common name for a Form I-151, Alien
Registration Receipt Card. See Moorhead v. United States, 774
F.2d 936, 938-939 n.4 (9th Cir. 1985); Gooch v. Clark, 433 F.2d
74, 76 (9th Cir. 1970); see also sec. 264 of the Immigration and
Nationality Act (1952), ch. 477, 66 Stat 163, 224, as amended, 8
U.S.C. sec. 1304 (1994); 8 C.F.R. sec. 264.5 (2000); Gordon &
                                - 4 -

green card application, petitioner said that he intended to study

in the United States and stay as an immigrant.    The United States

issued a green card6 to petitioner, his parents, and a brother

and sister in the mid-1960s.    Petitioner’s father came to the

United States in the mid-1960s for an amount of time not

specified in the record and then returned to Iran.

     Petitioner visited the United States in July 1965.    He had

his green card at that time.    Also that month, he began attending

high school in Great Britain.    Petitioner attended high school in

England until May 1969.

     2.   Petitioner’s Presence in the United States From 1969 to
          1977

     Petitioner applied only to colleges in the United States.

Petitioner came to the United States on an Iranian passport and a

student visa7 issued by the United States in 1969.

     Petitioner attended Florida Southern College from July 1969

to May 1973, and he received a 4-year college degree in business.


Rosenfield, Immigration Law and Procedure, sec. 6.10d (rev. ed.
1959) and sec. 6.9d (rev. ed. 1985).
     6
       In a letter to petitioner dated Sept. 22, 1986, the
District Director for the New York District of the U.S.
Department of Justice, Immigration and Naturalization Service,
stated that petitioner was a lawful permanent resident on July
28, 1965.
     7
        A student visa authorizes an alien to be admitted to the
United States for the time necessary to complete a full course of
study plus 60 days. Immigration and Nationality Act (1952), ch.
477, sec. 101(a)(15)(F), 66 Stat. 163, 168; 8 U.S.C. sec.
1101(a)(15)(F); 8 C.F.R. sec. 214.2(f)(5).
                               - 5 -

While in Florida, petitioner obtained a license to buy and sell

real estate.

     Petitioner went to Iran about once every 2 years during the

years he was an undergraduate student.   He stayed 2-3 weeks per

visit.   In the late 1960s and early 1970s, petitioner told his

parents that he intended to reside in the United States.

Petitioner married his cousin, Shirley Elghanian, in Iran in July

1972.

     Petitioner began attending graduate school at George

Washington University, Washington, D.C., in September 1973.   He

received a master’s degree in business administration in 1976.

Petitioner and Shirley Elghanian rented an apartment in

Washington, D.C., while petitioner attended George Washington

University.

     After petitioner finished graduate school, he and Shirley

Elghanian shared an apartment in Boston with Moeez Elghanian,

Shirley Elghanian’s brother and petitioner’s cousin.   Petitioner

and Moeez Elghanian viewed various properties for possible

syndication, and they traveled frequently.

     Petitioner told his brother Phillip Elghanian after 1970 and

after petitioner got married that he intended to reside in the

United States.   Nassar Victory (Victory), petitioner’s second

cousin, saw petitioner about 10 times per year from 1970 to 1977.

Petitioner told Victory that he intended to reside in the United
                                - 6 -

States.    After graduate school, petitioner told Steven Kumin

(Kumin), a friend of his who lived in the Boston area, that

petitioner intended to reside in the United States.

     3.     The Customs Administration Building in Tehran, Iran

     On a date not specified in the record, petitioner’s father

paid about $2 million to buy land in Tehran, Iran, on which he

intended to build his personal residence.    At a time not

specified in the record, petitioner’s father arranged to have the

Customs Administration Building constructed on that site.

Petitioner’s parents owned the land on which it was to be built.

     The Customs Administration Building had 3 underground

parking levels, about 25 retail stores, and 3 office towers which

were 11 or 12 stories high.    The building occupied about an acre

of land.    It cost about $15 million to build the Customs

Administration Building and another $1.5 to $2 million for tenant

improvements.    The Iranian Department of Taxation and Customs

occupied the Customs Administration Building.

     Petitioner conveyed an interest in the building (about 6

meters by 14 meters, not otherwise described in the record) to

the regional electrical company for a price not stated in the

record on a date not clear from the record.
                               - 7 -

     4.   Events From 1977 to June 1979

     Based on the experiences of some of his relatives,

petitioner believed that he would be required to serve for 2

years in the Iranian military in order to return to Iran later to

deal with his family’s property.   On a date in 1977 not specified

in the record, petitioner returned to Iran to begin that service.

Petitioner’s parents lived in Iran at that time.   Petitioner left

a car, some dishes, photographs, and clothing in Boston, which he

intended to reclaim later.

     Shirley Elghanian returned to Iran with petitioner in 1977.

Petitioner’s daughter, Roya, was born in Iran in December 1977.

Because of political unrest in Iran, Shirley Elghanian and Roya

went to London in 1978 to live with Shirley Elghanian’s parents.

     Petitioner’s mother and his brother, Phillip Elghanian,

moved to the United States in 1978.

B.   Events in 1979

     1.   The Expropriation

     In January 1979, the Shah of Iran was deposed in a

revolution.   The Ayatollah Khomeini became the new leader of

Iran.8



     8
        For a more detailed account of these events in Iran, see
Contl. Ill. Corp. v. Commissioner, 94 T.C. 165 (1990);
Halliburton Co. v. Commissioner, 93 T.C. 758 (1989), affd. 946
F.2d 395 (5th Cir. 1991); and Moshrefzadeh-Sani v. Commissioner,
T.C. Memo. 1992-592.
                                - 8 -

     Petitioner’s father moved to the United States in 1979.

Petitioner’s father’s green card was renewed at that time.

Petitioner’s parents have lived in the United States since 1979.

In April or May 1979, petitioner’s father asked his son-in-law,

Alex Ebrahimzadeh (Ebrahimzadeh), to retrieve the family’s green

cards from petitioner’s father’s office in Tehran and bring them

to him in New York.   A U.S. Customs inspector confiscated those

green cards when Ebrahimzadeh brought them into the United

States.

     2.    Petitioner’s Imprisonment and Escape From Iran

     Petitioner completed 2 years of service in the Iranian

military around May 1, 1979.    He intended to leave Iran at that

time, but the Iranian government prevented petitioner from

leaving.   Habib Elghanian, petitioner’s uncle, was executed on

May 29, 1979.   The Iranian government expropriated petitioner’s

family businesses and property.

      On June 1, 1979, petitioner was arrested, blindfolded,

interrogated, and imprisoned.   He was released on July 1, 1979,

He reasonably feared for his life in Iran, and on July 13, 1979,

he fled from Iran under an assumed name.   He has not returned to

Iran since then.

     3.    Petitioner’s Travels in 1979

     After leaving Iran, petitioner went to London to see Shirley

Elghanian and Roya.   He stayed there for a few weeks.   On August
                               - 9 -

1, 1979, he traveled to Spain to visit his brother, Farhad

Elghanian, and to obtain a visa to come to the United States.    He

received a B-1 or B-2 entry visa.9

     Petitioner then went to New York where he spent about 3

weeks with his parents, family, and friends.   He then went to

France for about 1 month.   Petitioner went to London for 2-3

weeks in November 1979, and then to Israel for 1-2 weeks, and

back to London for about 2 weeks.

     Petitioner then went to New York, stayed briefly with his

parents, and, in December 1979, began occupying an apartment at

279 E. 44th Street owned by petitioner, his wife, and her two

sisters.   Petitioner had a birthday party for his brother Phillip

at that apartment in December 1979.


     9
       B visas permit aliens to enter the United States
temporarily if they have a foreign residence that they have no
intention of abandoning, and do not engage in labor, study, or
work as a representative of foreign media while in the United
States. See sec. 101(a)(15)(B) of the Immigration and
Nationality Act, 66 Stat. 168, 8 U.S.C. sec. 1101(a)(15)(B). A
B-1 visa may be issued to an alien visiting the United States on
business for up to 6 months and may be extended for periods of up
to 6 months. 8 C.F.R. sec. 214.2(b) (1976); see Elsaesser v.
Commissioner, T.C. Memo. 1978-2 (applies 8 C.F.R. sec. 214.2(b)
(1976)). B-2 visas are issued to aliens who are temporary
visitors to the United States for business or for pleasure. See
sec. 101(a)(15)(B) of the Immigration and Nationality Act, 66
Stat. 168, 8 U.S.C. sec. 1101(a)(15)(B); 22 C.F.R. 41.12 (1970
ed.). A B-2 visa may be issued to an alien visiting the United
States temporarily if the alien has permission to enter a foreign
country when he or she leaves the United States. 22 C.F.R. sec.
41.25 (1970 ed.); see Dillin v. Commissioner, 56 T.C. 228, 243
(1971) (discussing B visas and applying 22 C.F.R. sec. 41.25
(1970 ed.)).
                                - 10 -

     Petitioner was not engaged in the sale of stock as a trade

or business in 1979.    Petitioner owned a rental apartment near

London that he had received as a gift.     He never lived in that

apartment.

C.   Events in the 1980s

     1.      Filing of Petitioner’s Family’s Expropriation Claim

     Petitioner and his family learned of the expropriation in

1980.     On May 15, 1980, petitioner’s father, on behalf of his

immediate family, filed with the Office of Foreign Assets Control

of the United States Department of the Treasury a claim for the

expropriated property (Census of Claims by United States Persons

Against Iran).     In it, petitioner’s father claimed expropriation

losses of $113,530,000, including stock which he valued at

$11,580,000; the Customs Administration Building which he valued

at $20 million; other real property which he valued at $10.45

million; loans which he valued at $1.5 million; and tangible

personal property which he valued at $70 million.     Petitioner

signed the claim.     In the claim, petitioner’s father stated that

the date of loss was June or July 1979.     Petitioner’s family

prepared the form from memory.     None of the property listed in

the claim was ever connected with a trade or business in the

United States.
                                - 11 -

     2.     Petitioner’s Activities

     In 1980, petitioner traveled to and from New York and

Europe, spending a month or two at each location.     At that time,

petitioner’s wife’s family owned four or five hotels in central

London, the largest of which had 400 rooms.

     Shirley Elghanian and Roya were in London until the end of

1981.     At that time they went to New York and stayed with

petitioner in the apartment at 279 E. 44th Street.     In May 1982,

petitioner, Shirley Elghanian, and Roya moved to an apartment on

57th Street in New York, where they lived until September 1982.

     Petitioner and Shirley Elghanian separated in September

1982.     Shirley Elghanian and Roya went to London on October 6,

1982.     Petitioner went to London in late October 1982, to visit

Roya, to try to reconcile with Shirley Elghanian, and to retain

divorce counsel.     Thereafter, petitioner traveled frequently

between London and New York to try to gain custody of Roya and to

conduct business not described in the record in London.

     On September 7, 1983, U.S. Immigration and Naturalization

Service (INS) authorities stopped petitioner at JFK International

Airport.     They alleged that he had presented an altered Iranian

passport.     Petitioner told them that personnel at an Iranian

consulate had made handwritten entries on the renewal pages of

petitioner’s Iranian passport, including extending the expiration

date.     At that time, in response to a request from an INS
                                - 12 -

officer, petitioner provided an affidavit regarding his

application to enter the United States.     In it, he said, inter

alia, (1) that he did not have an apartment in the United States,

(2) that he would eventually like to reside permanently in the

United States, and (3) that he intended to stay in the United

States for several weeks and then travel to Israel.

     Petitioner applied for political asylum in the United States

in October 1983.     He was staying at his parent’s apartment in New

York at that time.     Petitioner was granted political asylum in

the United States on April 20, 1984.     He was divorced from

Shirley Elghanian in 1984.

     Around 1985, petitioner’s family heard that the Iranian

government would welcome expatriates to return to run their

former businesses.     Khalil and Soleyman Elghanian, petitioner’s

cousins, went to Iran on behalf of the family in 1985 in an

attempt to reclaim Elghanian family assets.     They discovered that

the offer was a hoax.     They believed that they were in danger in

Iran.     They paid smugglers to help them escape from Iran.

D.   Petitioner’s Tax Filing and Earnings History and 1986 Income
     Tax Return

        Petitioner filed no U.S. Federal income tax returns for any

tax year before 1986.     He had no earnings in the United States

before 1987.
                              - 13 -

     A certified public accountant (C.P.A.) prepared petitioner’s

1986 income tax return on April 21, 1987.   In it, petitioner

reported no gross income and no tax due.

     On November 5, 1987, petitioner’s C.P.A. prepared

petitioner’s amended return for 1986.   In that return, petitioner

claimed a $9,339,066 loss on Form 4797, Gains and Losses From

Sales or Exchanges of Assets Used in a Trade or Business and

Involuntary Conversions.   The $9,339,066 loss was based on

petitioner’s share of the family assets expropriated by the

Iranian government.   Petitioner attached the following statement

to his amended 1986 return:

     The losses taken on Form 4797 represent taxpayers’
     losses of business assets in Iran. They are based
     solely on the Census of Claims by United States Persons
     Against Iran filed with the Office of Foreign Assets
     Control, Department of the Treasury, Washington, D.C.
     20220, by the taxpayers’ family. The taxpayers’ family
     has allocated to each family member their proportionate
     interest in such assets. The only losses taken were
     those the taxpayer deemed to be business assets and it
     is their contention that amount claimed are their
     costs. The taxpayers determined that these assets were
     only seized in 1986. The tax preparers have not
     verified the assets, their costs or the year the loss
     was incurred.

E.   Petitioner’s 1987-91 Income Tax Returns

     Petitioner filed returns for 1987-89, and petitioners filed

joint returns for 1990-91 in which they reported the following:
                                    - 14 -
                                      State                           Net
                   Taxable             Tax   Capital    Sched. E   Operating
Year     Wages     Interest Dividends Refund (Losses)   (Losses)    (Losses)
1987                 $5,272   $2,957        ($3,000)              ($9,339,066)
1988    $400,000    262,895 395,255          (3,000)    ($17,708)   (694,227)
1989   1,000,000    701,424 218,188          (3,000)    (231,737) (8,622,478)
1990                719,826   31,905         (3,000)     (79,383)    (25,850)
1991      6,921     133,587   16,136   $958  (3,000)        (447)

F.     Events After the 1980s

       Petitioner married Mitra Rasson in New York, New York, in

1990.    Petitioner began living with his family in France at a

time not specified in the record before September 11, 2001, and

continuing through the date of trial.          His children attend school

there.    Petitioner has never become a citizen of the United

States.

G.     Respondent’s Settlement With Petitioner’s Father and Brother

       Petitioner’s father and Phillip Elghanian each deducted

losses of $9,339,066 for 1980 from the expropriation of their

Iranian property.       Those losses were carried forward to 1988 and

1989 by petitioner’s father and to 1989 by Phillip Elghanian.                In

2003, the Commissioner allowed each of them an NOL of $3,868,946.

                                    OPINION

A.     Whether the Expropriation Loss Occurred in 1979 or 1986

       To be a deductible loss under section 165, the transaction

must be closed, completed, and fixed by identifiable events in

the taxable year.       Boehm v. Commissioner, 326 U.S. 287, 291-292

(1945); sec. 1.165-1(b), Income Tax Regs.           Whether a loss

occurred during a particular taxable year is a question of fact.

Boehm v. Commissioner, supra at 294; Korn v. Commissioner, 524
                              - 15 -

F.2d 888, 890 (9th Cir. 1975), affg. T.C. Memo. 1973-258.    An

important indication of the year of loss is the year that the

taxpayer loses control and possession of the property.     United

States v. S.S. White Dental Manufacturing Co., 274 U.S. 398, 402

(1927).

     Petitioners contend that the expropriation loss occurred in

1986 because (1) the Iranian government promised until 1986 to

restore the assets to the Elghanian family if they would return

to operate the business; (2) petitioner believed until the time

of the Iran-Contra affair in 1986 that the United States would

overthrow the Iranian government, enabling his family to recover

its property; and (3) petitioner had a reasonable prospect of

recovery until 1986.

     We disagree.   The Iranian government’s attempt to lure

members of petitioners’ family back to Iran was a hoax.

Petitioner’s belief that the United States would restore his

family’s property was remote, nebulous, and speculative.    A loss

deduction is not postponed based on remote or nebulous

possibilities of recovery.   Id. at 402-403.   We conclude that the

loss did not occur in 1986, and, based on this record, that it

occurred in 1979, the year of the expropriation.10


     10
        Petitioners bear the burden of proof on the residence
and expropriation loss issues. Rule 142(a); Welch v. Helvering,
290 U.S. 111, 115 (1933). The burden of proof for a factual
issue may shift to the Commissioner under certain circumstances.
                                                   (continued...)
                                - 16 -

B.     Whether Petitioner Was a Resident of the United States in
       1979

       1.   Background

       The parties dispute whether petitioner was a resident of the

United States in 1979.11   If petitioner was not a U.S. resident

in 1979, then petitioners may not deduct the expropriation losses

in 1979, or carry those losses forward to later years during

which he was a U.S. resident.

       An alien is a resident of the United States if he or she is

present in the United States and is not a mere transient or

sojourner, the determination of which depends on the intended

length and nature of the stay.    Sec. 1.871-2(b), Income Tax Regs.

The fundamental issue in determining residence is whether the

alien intends to make the United States his or her home.    Dawson

v. Commissioner, 59 T.C. 264, 268 (1972).    An alien who lives in

the United States and has no definite intention as to his or her

stay is a resident for purposes of the income tax.    Id. at 268

n.3.




       10
      (...continued)
Sec. 7491(a). Petitioners do not contend that sec. 7491(a)
applies.
       11
       In deciding petitioner’s residence for 1979, we consider
the law then in effect. Sec. 7701(b) was enacted in 1984
effective for taxable years beginning after Dec. 31, 1984.
Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 138, 98 Stat.
672.
                                - 17 -

     The term “residence” and “domicile” are not synonymous;

however, to be a resident, the taxpayer must have some degree of

permanent attachment to the country of residence.     Park v.

Commissioner, 79 T.C. 252, 287 (1982), affd. without published

opinion 755 F.2d 181 (D.C. Cir. 1985).     An individual may be a

resident of the United States without terminating his or her

residence in another country.     Id. at 287-288.

     2.     Whether Petitioner Was a Resident of the United States
            in 1979

     Petitioner argues that the following establish that he was a

U.S. resident from 1969 through the years at issue:     (a) He was

issued a green card in 1965; (b) he was in the United States from

1969 through 1977 and part of 1979; (c) his parents, brother, and

some other family members lived here; and (d) he told some

members of his family and friends that he wanted to live in the

United States.

            a.   Petitioner’s Green Card

     Petitioner argues that the fact that he received a green

card and permanent lawful resident status in 1965 shows that he

was a resident of the United States from 1969 through the years

in issue.    We disagree.   Issuance of a green card in 1965, when

petitioner was about 14 years old, has little or no bearing on

whether petitioner was a resident in 1979.     For that we look to

events which occurred closer to 1979.
                                - 18 -

     One reason that we give little weight to the fact that

petitioner had a green card in 1965 is that petitioner, in his

dealing with U.S. immigration matters, frequently acted as if he

were not a U.S. resident.   First, the record does not indicate

that petitioner ever used the green card after his short visit

here in July 1965.

     Second, petitioner used a student visa issued by the United

States to enter the United States in 1969 to attend college.

Whatever intent to reside in the United States that petitioner

may have had when he obtained a green card in 1965 is clouded by

his obtaining a student visa, which authorizes an alien to remain

in the United States only as long as necessary to complete a

course of study plus 60 days.    Sec. 101(a)(15)(F) of the

Immigration and Nationality Act,12 66 Stat. 168, 8 U.S.C. sec.

1101(a)(15)(F)(I); see 8 C.F.R. sec. 214.2(f)(5)(iv) (1981).

     Petitioner testified that he obtained and used a student

visa in 1969 to facilitate leaving Iran to attend college in the

United States and to facilitate travel to and from Iran when he


     12
        Immigration and Nationality Act (1952), ch. 477, sec.
101(a)(15)(F), 66 Stat. 168; 8 U.S.C. sec. 1101(a)(15)(F)(i)
(1970), describes persons qualified for a student visa as:

     an alien having a residence in a foreign country which
     he has no intention of abandoning, who is a bona fide
     student qualified to pursue a full course of study and
     who seeks to enter the United States temporarily and
     solely for the purpose of pursuing such a course of
     study consistent with * * * [requirements set forth
     elsewhere in the Code]. [Emphasis added.]
                                  - 19 -

did not have his green card.      Despite his explanation, we believe

petitioner’s use of a student visa is inconsistent with a claim

that, at that time, he intended to be in the United States other

than as a student.

     Third, petitioner entered the United States under a B-1 or

B-2 visa in 1979.    Aliens entering the United States under a B

visa may stay in the United States only temporarily.     Sec.

101(a)(15)(B) of the Immigration and Nationality Act,13 66 Stat.

167, 8 U.S.C. sec. 1101(a)(15)(B);14 8 C.F.R. 214.2(b)(1976).

Authorities issuing the B visa presumably found15 that petitioner

qualified for it at the time; i.e., that he was entering the


     13
        Immigration and Nationality Act (1952), ch. 477, sec.
101(a)(15)(B), 66 Stat. 167; 8 U.S.C. sec. 1101(a)(15)(B) (1970),
describes persons qualifying for a B visa as:

          (15) The term "immigrant" means every alien except
     an alien who is within one of the following classes of
     nonimmigrant aliens–

                 *    *       *     *      *   *   *


          (B) an alien (other than one coming for the
     purpose of study or of performing skilled or unskilled
     labor or as a representative of foreign press, radio,
     film, or other foreign information media coming to
     engage in such vocation) having a residence in a
     foreign country which he has no intention of abandoning
     and who is visiting the United States temporarily for
     business or temporarily for pleasure; [Emphasis added.]
     14
          See supra note 9.
     15
       See Zacharias v. McGrath, 105 F. Supp. 421, 427 (D.D.C.
1952) (presumption of regularity applies to immigration matters).
                                - 20 -

United States temporarily, that he had a foreign residence that

he had no intention of abandoning, and that he did not enter to,

for example, work or study.    See supra p. 9 note 9, p. 19 note

13.

        Fourth, petitioner’s statement in his application for

permanent residence in the United States in 1983 that he

“eventually” would like to permanently reside in the United

States seems at odds with the proposition that he already was a

U.S. resident.

            b.   Petitioner’s Years in the United States

      Petitioner argues that the fact that he was in the United

States from 1969 through 1977 and part of 1979 establishes that

he was a U.S. resident in 1979.    We disagree.   Petitioner did not

work in the United States, participate in the economy or society,

or demonstrate a degree of permanent attachment to the United

States.     Park v. Commissioner, 79 T.C. at 287; see Demore v. Kim,

538 U.S. 510, 544 (2003); In re Griffiths, 413 U.S. 717, 722

(1973); Sochurek v. Commissioner, 300 F.2d 34, 38 (7th Cir.

1962), revg. and remanding 36 T.C. 131 (1961).

      Petitioners point out that we have held that a taxpayer who

entered the United States under a student visa was a U.S.

resident.    Siddiqi v. Commissioner, 70 T.C. 553 (1978).

Petitioners contend that this case is like Siddiqi.     We disagree.

The taxpayer in that case interrupted his formal education to
                                  - 21 -

work full time and earn wages for 14 months.        Id. at 557.    His

contacts with the economy were greater than those of petitioner.

Petitioner obtained a real estate license in Florida, and he

considered real estate syndication and viewed real estate while

in Boston.        However, he was not employed in the United States

from 1969 to 1979, and he did not earn any income in the United

States from real estate or any other business activity during

those years.      He did not show that he had economic ties to the

United States similar to the taxpayer in Siddiqi.

     Petitioner traveled to London, Spain, France, and Israel in

1979.   In that year his trips to and activities in the United

States were very limited.       He occupied an apartment in New York

in December, but he did not show an intent to form ties to the

community.    During his time as a student, in Boston, and in New

York in 1979, petitioner was not deeply or continuously involved

in business, personal, social, or political affairs in the United

States.    Cf. Park v. Commissioner, 79 T.C. at 289.

             c.     Petitioner’s Family Members

        It appears from our record that petitioner’s parents and

brother, Phillip Elghanian, have been U.S. residents since 1978

or 1979.   Petitioner contends that this shows that he was also a

resident in 1979.       We disagree.   Petitioner has made other

choices, apparently independent of his family.
                                - 22 -

          d.      Petitioner’s Statements to Family and Friends

     Petitioner points out that some of his family members and

friends testified that he told them in the 1970s that he intended

to reside in the United States.    We have no reason to doubt that

testimony, but we believe petitioner’s actions over the years

speak more clearly to his intent than his statements to those

witnesses.

          e.      The Petition in This Case

     Petitioner signed both petitions which state that he became

a U.S. resident in 1982.    We treat those statements as

petitioner’s admission that he was not a resident of the United

States in 1979.    Statements in petitions filed in this Court are

binding admissions by a taxpayer absent cogent proof that they

are incorrect.    See Beard v. Commissioner, 82 T.C. 766, 768 n.6

(1984), affd. 793 F.2d 139 (6th Cir. 1986); Mooneyham v.

Commissioner, T.C. Memo. 1991-178.       Petitioners have not

presented cogent proof that petitioner was a resident of the

United States in 1979.

     3.   Conclusion

     We conclude that petitioner was not a U.S. resident in 1979.

C.   Whether Petitioner Is Entitled To Deduct an Expropriation
     Loss in the Same Amount as That Allowed by Respondent in a
     Settlement With His Father and Brother

     Respondent permitted petitioner’s brother and father each to

carry forward expropriation losses of $3,868,946 from 1980.

Petitioners contend that his losses were the same as his father
                                - 23 -

and his brother, and that respondent must treat petitioner and

his father and brother consistently.     We disagree.

     Tax laws must be applied as uniformly as possible.    See

Sunday Lake Iron Co. v. Wakefield Tp., 247 U.S. 350 (1918).

However, the Commissioner is not required to offer a settlement

to one taxpayer consistent with that offered to other similarly

situated taxpayers, absent proof that a taxpayer has been singled

out for adverse treatment based on impermissible considerations

such as race or religion, and absent contractual agreements to

the contrary.     Estate of Campion v. Commissioner, 110 T.C. 165,

170 (1998), affd. without published opinion sub nom. Drake Oil

Tech. Partners v. Commissioner, 211 F.3d 1277 (10th Cir. 2000),

and Tucek v. Commissioner, 198 F.3d 259 (10th Cir. 1999); Norfolk

S. Corp. v. Commissioner, 104 T.C. 13, 58-59, supplemented by 104

T.C. 417 (1995), affd. 140 F.3d 240 (4th Cir. 1998); Davis v.

Commissioner, 65 T.C. 1014, 1022 (1976).

     Petitioners contend that respondent is estopped from denying

that petitioner is entitled to deduct expropriation losses in the

same amount as respondent allowed for his father and brother.     We

disagree.   For estoppel to apply to a party, the other party must

have reasonably relied to its detriment on the conduct of the

estopped party.     Lyng v. Payne, 476 U.S. 926, 935-36 (1986);

Heckler v. Cmty. Health Servs., Inc., 467 U.S. 51, 59 (1984).

Petitioner filed his 1986 amended return in 1987, which was
                               - 24 -

before respondent settled with his father and brother in 2003.

Petitioner could not have relied on those settlements when he

filed his 1986 amended return.    There is no evidence that

petitioner relied on any communication by respondent in preparing

his 1986 amended return.    Finally, it appears from our record

that petitioner’s parents and probably his brother were U.S.

residents by 1979.    In his petition, petitioner stated that he

became a U.S. resident in 1982.    Our record suggests that

petitioner did not establish U.S. residence when his father and

brother did.

     We conclude that estoppel does not apply and that petitioner

is not entitled to deduct an expropriation loss in the same

amount as that allowed by respondent in a settlement with his

father and brother.

D.   Whether Petitioner Is Liable for the Addition to Tax and
     Penalty for Substantial Understatement of Income Tax for
     1988 and 1989

     For 1988, a taxpayer is liable for an addition to tax equal

to 25 percent of the amount of any underpayment attributable to a

substantial understatement of income tax.    Sec. 6661(a).    The

amount of the understatement is reduced by amounts attributable

to items (1) for which there existed substantial authority for

the taxpayer's position, or (2) adequately disclosed on the

taxpayer’s return or in a statement attached to the return.      Sec.

6661(b)(2)(B).
                                - 25 -

     For 1989, a taxpayer is liable for an accuracy-related

penalty in the amount of 20 percent of any part of an

underpayment attributable to, among other things, a substantial

understatement of income tax.    Sec. 6662(a) and (b)(2).   The

amount of the understatement is reduced by amounts attributable

to items (1) for which there was substantial authority for the

taxpayer's position, or (2) adequately disclosed on the

taxpayer’s return or in a statement attached to the return.       Sec.

6662(d)(2)(B).   The accuracy-related penalty does not apply to

any part of an underpayment for which was a reasonable cause and

with respect to which the taxpayer acted in good faith.     Sec.

6664(c)(1); sec. 1.6664-4(a), Income Tax Regs.

     Respondent contends that petitioner is liable for the

addition to tax under section 6661(a) for 1988 and the accuracy-

related penalty under section 6662(a) for 1989 for substantial

understatement of tax.   We disagree.    Petitioner attached a

statement (which he titled a “rider”) to his 1986 amended return.

Disclosure is adequate under section 6661(b)(2)(B)(ii) if, inter

alia, it is made on a statement that includes a caption

identifying the statement as disclosure under section 6661.       Sec.

1.6661-4(b) and (c), Income Tax Regs.     The statement and the

return were sufficient to apprise respondent that the deduction

was for an expropriation loss, its amount, and the potential

controversy.   Petitioner did not refer to section 6661 on his
                             - 26 -

1986 amended return or its attachments.   However, a disclosure

need not do so if, as here, it clearly puts the Commissioner on

notice of the possible controversy.   See Schirmer v.

Commissioner, 89 T.C. 277, 285-286 (1987); Mitchell v.

Commissioner, T.C. Memo. 1994-237, affd. 73 F.3d 628 (6th Cir.

1996).

     We conclude that petitioner is not liable for the addition

to tax under section 6661(a) for 1988 and for the accuracy-

related penalty under section 6662(a) and (b)(2) for 1989 for

substantial understatement of tax.

                                              Decisions will be

                                          entered under Rule 155.
