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After petitioner husband’s plea agreement, Gim Baker
(Baker), a revenue agent for the Internal Revenue Service (IRS),
was assigned to examine petitioner husband’s 1989 Federal income
tax liability and petitioners’ 1990 joint Federal income tax
return. Baker issued letters to both petitioners, requesting
them to provide documentation such as income records and expense
records. In response, petitioner husband sent Baker a letter
stating that it was impossible for him to collect the necessary
documents while he was incarcerated and requesting that the civil
examination be postponed until his projected release in 2000.
Petitioner wife–-whose liability related only to taxable year
1990--refused to provide the requested information until the IRS
showed her what information it had in its possession.
In conducting the civil investigation, Baker relied on the
criminal net worth computation rather than performing an
independent income reconstruction for either year in issue.
Except for her unsuccessful attempt to procure information from
petitioners, Baker conducted no investigation regarding
petitioners’ finances and did not verify the numbers contained in
the criminal net worth summary. Instead, she copied the criminal
net worth summary that was attached to petitioner husband’s plea
agreement, using identical numbers to calculate the increases in
net worth for each of the taxable years 1989 and 1990 but making
certain modifications. For instance, in drafting the notice of
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Last modified: May 25, 2011