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resources were available to him from his business interests in
the Philippines. Ms. Yue and her supervisor accepted
Mr. Makalintal’s explanation and finalized the return for
Mr. Makalintal’s and petitioner’s signatures.
When Mr. Makalintal gave petitioner the 1986 joint income
tax return for her signature, petitioner reviewed the return, and
petitioner also specifically asked Mr. Makalintal how
Mr. Makalintal and she were able to afford such a high standard
of living in light of the income reported on the return.
Mr. Makalintal informed petitioner that he had access to funds in
the Philippines that had been earned in years prior to 1986 and
that were not reportable as income for 1986.
Because, among other reasons, Mr. Makalintal frequently
represented that his business interests in the Philippines were
successful and because Mr. Makalintal used an accounting firm to
prepare the income tax return, petitioner accepted
Mr. Makalintal's explanation of the income reported on the 1986
return, and petitioner signed the return.
In connection with her review and signing of the 1987 and
1988 joint Federal income tax returns, petitioner again asked
Mr. Makalintal about the income reported thereon in light of the
money they were spending. Mr. Makalintal again reassured
petitioner that he had available nontaxable financial resources
from the Philippines.
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