Ronnie F. Judy - Page 15

                                               - 15 -                                                 

            each of the years at issue in at least the amounts of $16,383 and                         
            $21,698, respectively.  It is further weakened by the stipulated                          
            fact that he failed to maintain adequate records of his farming                           
            operations.                                                                               
                  Even on its own terms, petitioner’s account is not                                  
            satisfactory.  There are unanswered questions and inconsistencies                         
            that undercut its persuasiveness.  First, petitioner did not                              
            offer to explain why Mr. Judy would have preferred to withdraw                            
            the $183,000 he allegedly inherited from his sister and keep it                           
            hidden under his bed rather than leaving it in bank accounts                              
            where it could have earned interest.  Such behavior is sufficient                         
            to raise doubts.  Cf. Cefalu v. Commissioner, 276 F.2d 122, 127                           
            (5th Cir. 1960), affg. T.C. Memo. 1958-37.                                                
                  Second, the record discloses that petitioner obtained loans                         
            from unrelated parties during the period that he claims to have                           
            had access to interest-free funding out of his father’s cash                              
            hoard.  For example, in November 1990 he borrowed $31,000 from                            
            Dewey Cowart to finance the purchase of real estate.  Petitioner                          
            testified that he repaid this loan by the end of that year using                          
            funds from his father’s cash hoard.  It is not clear why he felt                          
            he needed a short-term “bridge loan” from Dewey Cowart if he                              
            could have borrowed from the cash hoard in the first place.                               
            Several unreported income cases have noted the apparent                                   
            inconsistency between borrowing from third parties and claiming                           





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011