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participate. Petitioner chose at that point to leave the
courtroom and has had no further contact with the Court.
Following petitioner’s departure, the Court made absolute
the Rule 91(f) order to show cause, ordering that the facts set
forth in respondent’s proposed stipulation of facts be accepted
as established for purposes of this case and that the exhibits
attached thereto be received into evidence. In light of these
developments, respondent also moved orally to dismiss
petitioner’s case, insofar as concerned the tax deficiencies
determined in the statutory notice, for failure properly to
prosecute. The Court took this motion under advisement, and
respondent then presented testimony and documentary evidence with
respect to the fraud penalties.
Factual Background
As indicated above, some of the facts have been stipulated
pursuant to Rule 91(f), and such facts are so found. These
stipulations, with accompanying exhibits, are incorporated herein
by this reference.
Prior to and during the years at issue, petitioner owned and
operated the Appliance Recycling Factory (ARF), a sole
proprietorship. ARF was engaged in the business of buying used
appliances, refurbishing them, and then reselling the refurbished
appliances. Sales of the appliances were made to customers
through cash, check, credit, and barter transactions. At least
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