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of these additional deductions should be nor point to any evidence
in the record substantiating any such deductions. In any event,
the record does not establish that Sparkman is entitled to
additional itemized deductions.33
VI. Penalties and Additions to Tax
A. Addition to Tax for Failure To Timely File Returns
Respondent determined that Sparkman is liable for section
6651(a)(1) additions to tax for failure to timely file his Federal
income tax returns for tax years 1996, 1997, 1998, and 1999.
33 Although the record contains correspondence from the
Church of Scientology and related organizations purporting to
show contributions by Sparkman (some of which Sparkman concedes
he has already claimed on his 2000 Federal income tax return),
Sparkman testified that some unspecified amount of the
contributions came from HEH. He testified: “for some reason,
they sent it to me, it should have been sent to Hawaii
Environmental Holdings. * * * The church has added a confusion
into it that they’ve sent me a statement when it should have been
sent to someone else, to Murphy or to HEH.” Petitioners have not
argued that we should disregard HEH so as to entitle Sparkman to
deduct charitable deductions made by HEH, nor have petitioners
otherwise shown that Sparkman is entitled to deduct charitable
contributions made by HEH.
Similarly, the record contains certain mortgage interest
statements, purportedly sent to Sparkman by various lenders,
showing certain interest payments for 1998. Sparkman’s testimony
suggested that the additional interest expense related to a
California “Kagel Canyon” property that he claimed to have bought
in 1991. We note, however, that in Schedule A to the HEH
formation documents, Sparkman purported to convey “Kagel Canyon”
real estate to HEH. We also question whether Sparkman owned the
“Kagel Canyon” property at any relevant time: Evidence in the
record shows that in January 2000, Sparkman e-mailed Porter,
inquiring about buying a “farm” from her. Porter testified that
the property in question was a property in “Kagel Canyon”,
California.
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