- 11 - response to an informal request by the IRS, but only in response to a discovery order or subpoena. OPINION Petitioners are in the real estate business. Although they filed a joint income tax return for 1989 which reflected substantial income from their joint endeavors, they filed no returns for 1990 and 1991, the years in issue. About 3 weeks before trial they delivered signed joint returns for those years to respondent's counsel. These documents are stipulated as part of the record. Petitioners failed to produce any records, either during the audit process or in preparation for trial or at trial, on the basis of which respondent or the Court could reconstruct their income. Consequently respondent reconstructed petitioners' income by using third party information and application of the CPI to amounts appearing on petitioners' 1989 return, as modified pursuant to our opinion in King v. Commissioner, T.C. Memo. 1994-318. Although both petitioners participated in the trial of this case, only Doyle testified. In his testimony he made no effort to establish the couples' correct taxable income for the 2 years in question. Rather, his testimony consisted mainly of complaints about repeated IRS audits, which, judging from this case, were the result of petitioners' own persistent refusal toPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
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