- 29 - Petitioners’ own testimony confirms their having received this hourly compensation and tip income. Petitioners have not explained their total failure to report these amounts. Petitioners’ explanations of why fraud penalties should not be imposed lack coherence; if anything, these explanations’ implausibility confirms our conclusions as to fraud. Petitioners acknowledge that they earned the compensation computed on an hourly rate for the hours they worked, but insist that these amounts were not “wages”. Petitioners contend that these amounts were “tips”. When confronted at trial with the unlikelihood that the amount of patrons’ tips precisely matched their hourly rate times hours worked, they lapsed into unresponsiveness. On opening brief and again on answering brief, petitioners contend that they “should not be subject to any civil fraud penalties on the tip income received from the casino as they have reasonable cause for their actions”; yet, they do not tell us what is this “reasonable cause”. On opening brief and again on answering brief, petitioners contend as follows: With respect to the audit examination involving the Balots, the IRS has failed to establish--through clear and convincing evidence--that there is an intentional wrongdoing on the part of the taxpayer. [Sic.] First, the Balots were never at any time involved with the managerial operations of the casino as they worked part-time. Therefore, they were never in any position to commit any fraudulent acts pertaining to their work in the casino.Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Next
Last modified: May 25, 2011