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individual petitioners' deficiency attributable to the interest
income for 1987 and 1988 in the amounts of $15,731 and $19,722,
respectively.
Petitioner husband was aware of the Standard Chartered
account and its balance. Statements from the Standard Chartered
bank account were addressed to "Chan Don A. & Lily Chan". In
prior years, the statements were usually mailed to Eastimpex's
office. During the years in issue, however, the statements were
mailed to an address in Hong Kong. Individual petitioners
received mail regarding their personal finances at their personal
address as well as at their Eastimpex office. They depended on
Eastimpex's bookkeepers to turn over mail received at Eastimpex
to petitioners' accountant. Individual petitioners did not file
Treasury Form 90-22.1, Report of Foreign Bank and Financial
Accounts, during the years in issue to disclose the overseas bank
account, as required.
OPINION
Corporate petitioner Eastimpex has failed to produce
invoices for a portion of the amount it claimed as the cost of
goods sold. Eastimpex contends that it did not receive accurate
invoices of its costs in order to help its related supplier Shin
conceal income from the Taiwanese Government. Eastimpex asserts
that this scheme was devised only to avoid Taiwanese tax and not
to deceive the Internal Revenue Service in any way. We do not
find this explanation to be credible.
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