- 3 -
Respondent filed an answer to the petition denying all
substantive allegations of fact and error contained in the
petition. In addition, respondent made affirmative allegations
of fact in support of respondent's determination that petitioners
are liable for additions to tax for fraud. Specifically,
respondent alleged that petitioners: (1) Failed to file timely
income tax returns for the years 1987 through 1992; (2) failed to
cooperate with the revenue agent conducting the audit of their
tax liability for 1987 through 1993; (3) failed to maintain
and/or provide respondent with complete and accurate records
concerning their income and expenses; (4) failed to provide the
account numbers or bank names for all accounts that they
maintained during tax years 1987 through 1993; (5) fraudulently
and with the intent to evade the payment of tax understated gross
receipts in the amounts of $84,245.08, $166,894.49, $230,670.52,
$248,756.27, $359,718.81, $292,114.15, and $453,071.47 for tax
years 1987 through 1993, respectively; (6) fraudulently and with
the intent to evade the payment of tax failed to report $3,035
and $1,000 of other income received during tax years 1987 and
1992, respectively; (7) fraudulently and with intent to evade the
payment of tax claimed false net operating loss carry forwards in
the amounts of $19,455, $29,091, $36,439, $38,680, and $99,818 on
their income tax returns for 1988 through 1993, respectively;3
3 The correct tax years with respect to this allegation are 1988
through 1992.
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