S. Robert Davis - Page 34




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               The 1985 return fully disclosed on Form 8283 the                       
          contribution of the Strata stock to ODC and the method used to              
          determine the stock's fair market value.  Furthermore, Mr. Davis            
          relied on Mr. Stimmel to prepare the 1985 return and the Form               
          8283 regarding the donation of Strata stock to ODC.  See infra.             
               I.   Reliance on Return Preparers                                      
               Respondent argues that petitioner knew about the erroneous             
          and fraudulent nature of the information provided to his return             
          preparers, and the return preparers were not in a position to               
          discover any errors or fraud.  Petitioner argues that his                   
          reliance on his employees and return preparers negates any                  
          fraudulent intent on his part.  We agree with petitioner.                   
               Petitioner's reliance upon third parties to keep his books             
          and records and to prepare his returns indicates the absence of             
          fraudulent intent.  See Hill v. Commissioner, T.C. Memo. 1982-              
          143; see also Marinzulich v. Commissioner, 31 T.C. 487, 490                 
          (1958).  Petitioner, in good faith, relied on members of his                
          staff to turn over all of his books and records and otherwise               
          make a full and complete disclosure to his third party return               
          preparers.  See Merritt v. Commissioner, 301 F.2d 484, 487 (5th             
          Cir. 1962), affg. T.C. Memo. 1959-172.                                      
               Mr. Davis was a busy man who relied on his employees and               
          professionals.  Jean Davis credibly testified that all                      







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