Harris Levin and Gayle Levin - Page 8

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          them as to actual knowledge and authority or lack of actual                 
          knowledge or authority unreliable.  We have said that "the                  
          distillation of truth from falsehood * * * is the daily grist of            
          judicial life."  Diaz v. Commissioner, 58 T.C. 560, 564 (1972).             
          In these circumstances, we must look to the objective conduct of            
          petitioners and to their specific testimony, especially that of             
          Ms. Levin, to determine whether it is consistent or inconsistent            
          with her having placed authority in Mr. Levin to act on her                 
          behalf.  If Mr. Levin had such authority, we have jurisdiction.             
          Moreover, if he had such authority, there was no fraud on the               
               Ms. Levin argues that she did not learn about her innocent             
          spouse claim until 1993 or her statute of limitations defense               
          until 1995 and, therefore, her failure to challenge the tax                 
          deficiency earlier is not an indication that she authorized or              
          ratified the petition.  Ms. Levin's argument is misplaced that              
          her conduct only after she was aware of all of her legal options            
          can be considered.  She essentially is saying:  "If I knew then             
          what I know now, I would have done things differently."  The                
          relevant course of conduct is what she did then.  In this regard,           
          we believe that the specific statements made during her testimony           
          are more revealing than her generalized denials of actual                   
          knowledge of or authorization of the steps being taken with                 
          respect to her tax liability.                                               

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