James Luther Cochrane - Page 15

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          rejected tax protester arguments of this sort.  See, e.g., United           
          States v. Hanson, supra at 945; United States v. Studley, supra             
          at 937.                                                                     
               Petitioner also conducted a tax return preparation and tax             
          counseling business from 1984 through 1986.  Petitioner advised             
          his clients to file Federal income tax returns claiming the same            
          foreign earned income exclusion that petitioner claimed on his              
          returns.  None of petitioner's clients actually worked or resided           
          outside the United States at any time during 1984, 1985, or 1986.           
          Petitioner received fees of $1,800 in 1984, $6,190 in 1985, and             
          $12,790 in 1986.5  Petitioner failed to report these fees as                
          income on his 1984 and 1985 income tax returns, and he has not              
          yet filed a return for 1986.                                                
               When interviewed by IRS special agents on April 15, 1987,              
          petitioner stated that he had never received payment from anyone            
          in exchange for his tax return preparation and counseling                   
          services.  Petitioner also informed the agents that he had earned           
          no income in 1986 and was not required to file a return for the             


               5In request 15, respondent lists the individuals who paid              
          petitioner for his tax return preparation and tax counseling                
          services plus the amount and year of payment.  Request 15 asserts           
          that Barbara Gibson paid petitioner $2,108 in 1985.  In request             
          38, respondent attached a copy of Barbara Gibson's canceled                 
          check, which is dated Mar. 21, 1986, and payable to petitioner in           
          the amount of $2,108.  We, therefore, find that petitioner                  
          received this amount from Barbara Gibson in 1986 rather than                
          1985.  With this adjustment, the amounts listed in request 15               
          correspond to the amount of tax return preparation fees listed in           
          the notices of deficiency for 1984, 1985, and 1986.                         




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