Doyle A. King - Page 11

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          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 to             







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