Betty June Dykstra and Pieter Dykstra - Page 7

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               At trial, petitioners presented no testimony as to the                 
          legitimacy of these claimed itemized deductions.  Further, on               
          brief, petitioners failed to address their entitlement to these             
          itemized deductions.  Accordingly, we treat this issue as                   
          conceded by petitioners.  See Petzoldt v. Commissioner, 92 T.C.             
          661, 683 (1989).                                                            
               Respondent determined that Mrs. Dykstra was liable for the             
          fraud penalty pursuant to section 6663(a) for 1994 and an                   
          addition to tax for her fraudulent failure to file a return                 
          pursuant to section 6651(f) for 1995.  Mrs. Dykstra admits that             
          she embezzled funds from Robins and failed to report the funds on           
          her 1994 return.  She also admits that she never filed a return             
          for 1995.  Mrs. Dykstra, however, claims that she did not know              
          that embezzled funds were taxable; therefore, she did not possess           
          the requisite fraudulent intent in 1994 or 1995.                            
               In order to prove fraud and fraudulent failure to file,                
          respondent must demonstrate by clear and convincing evidence that           
          Mrs. Dykstra intended to evade taxes believed to be owing by                
          conduct intended to conceal, mislead, or otherwise prevent the              
          collection of such taxes.  See Parks v. Commissioner, 94 T.C.               
          654, 660-661 (1990).  Where a taxpayer claims ignorance of the              
          law, respondent must negate that claim by clear and convincing              

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