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filed delinquent Federal individual income tax returns, claiming
the filing status of married, filing separately.
During the initial stage of the audit for the years in
issue, which began during or about October 1990, petitioner told
respondent’s agent that (1) he was merely an employee of Pieces
of Eight, (2) the agent was not to ask him any questions about
Pieces of Eight, and (3) the agent could not visit its store.
Petitioner also represented to respondent’s agent that Pieces of
Eight had been owned by Kathleen Murphy, a woman he had never
seen. Petitioner later told respondent’s agent that Kathleen
Murphy was an alias used by Ms. Murphy. Petitioner also claimed
that Kathleen Murphy had sold the business to Michael Van Heemst,
petitioner’s 17-year-old son, and showed respondent’s agent the
asset purchase agreement. Petitioner admitted to respondent’s
agent that none of the sale price had been paid and that he did
not know where Kathleen Murphy lived. Petitioner further claimed
during the audit that Pieces of Eight was owned by Michael Van
Heemst.
Petitioner initially was unwilling to provide Pieces of
Eight’s records to respondent’s agent, but, after the agent
issued a summons, petitioner provided seven boxes of records in
April 1991 at Pieces of Eight’s place of business, acting
pursuant to a purported power of attorney given by Michael Van
Heemst. Petitioner, however, did not assist the agent in
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Last modified: May 25, 2011