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$6,250, and $7,849, respectively. Respondent allowed them a
$7,310 self-employment tax deduction for 1990. For each of the
years 1983 through 1986, respondent also allowed Frank and
Katherine a $3,000 married couples deduction.
2. Larry’s Audit and Notice of Deficiency
Agent Combs met with Larry, Nancy, and Baptiste in February
1991 regarding the audit of Larry and Nancy’s 1988 return. He
subsequently expanded the audit to include their returns for
earlier and later years as well as the returns of Frank and
Katherine, Ronnie, and Sylvia. Larry and Nancy initially
provided information to Agent Combs relating to amounts claimed
on their returns. Subsequently, they refused Agent Combs’
requests for additional information and for an extension of the
statute of limitations for the 1987 return. Larry and Baptiste
refused to cooperate further in the audit on the advice of
counsel because they believed that Agent Combs was prejudiced
against Gypsies and had referred, or intended to refer, their
returns to the IRS Criminal Investigation Division.
During 1994, respondent made a jeopardy assessment against
Larry and Nancy after Agent Combs received information from the
Daytona Beach Shores police department that both Larry and his
daughter Sylvia had obtained driver’s licenses issued in false
names and had opened safe deposit boxes under those names into
which they were transferring moneys from other safe deposit
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