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We agree with petitioners that there is no evidence that
either Frank or Katherine failed to cooperate with respondent’s
revenue agents regarding the examination of their returns for the
years in issue. Agent Combs never interviewed Frank or Katherine
in the course of that examination. It also appears that
respondent’s revenue agents never requested verification for
items reflected on Frank and Katherine’s returns for the years in
issue. Rather, the adjustments to their returns resulted from
statements Katherine made during a deposition she gave relating
to docket No. 20854-94 to the effect that she and Frank furnished
funds to Larry, Ronnie, and Sylvia to purchase assets and pay
expenditures in excess of their incomes. Under those
circumstances, we find that the factor of cooperation supports
neither party’s position.
(7) Credibility of Witnesses
Petitioners assert that Katherine made no false or
misleading statements to respondent’s revenue agents. Moreover,
petitioners contend, respondent did not rebut Katherine’s cash
hoard testimony, which they assert was corroborated by
Katherine’s siblings. Respondent, on the other hand, contends
that petitioners and their witnesses offered inconsistent, vague,
unsupported, and self-serving testimony commencing with the
examination and continuing through trial.
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