- 35 -
petitioner Hae-Rong, as trustee of the Trusts, appeared before
respondent for the scheduled audit of their (his) return.
Neither petitioners Hae-Rong or Lucy B. Ni, nor any
representative on their behalf, appeared before respondent to
comply with summonses issued to such petitioners even though
ordered to do so by the U.S. District Court for the Northern
District of California. None of the petitioners have provided
records to respondent to substantiate the deductions, losses, and
other items claimed by them on their returns, nor do they have
such records. Moreover, by the April 25 order, we ordered
petitioners to produce documents to respondent and answer his
interrogatories. We have reviewed petitioners’ responses to the
April 25 order, copies of which are attached to the status report
(filed by respondent). Those responses are inadequate and, we
believe, not made in good faith. It appears to us that
petitioners abandoned their return positions before they filed
the petitions in these cases. We assume that they concluded that
their return positions lacked merit. See, e.g., Johnston v.
Commissioner, T.C. Memo. 2000-315 (reviewing “long line of
authority” prohibiting assignment to a trust of income earned
from rendering personal services). Rather than press positions
in which they appear to have lost confidence, petitioners chose,
instead, to pursue a strategy of noncooperation and delay,
Page: Previous 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 NextLast modified: May 25, 2011