Larry Dean Sykes and Ruby Sykes - Page 1

                                 T.C. Memo. 2001-169                                  

                               UNITED STATES TAX COURT                                

                   LARRY DEAN SYKES AND RUBY SYKES, Petitioners v.                    
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 3844-00.                      Filed July 6, 2001.           

                    Respondent’s (R) agents seized $149,200 cash from                 
               petitioners (Ps) during a search of Ps’ residence by                   
               Federal and State law enforcement officers.  R filed a                 
               jeopardy assessment in that amount against petitioner                  
               husband (P-H).  P-H filed suit in U.S. District Court                  
               to obtain judicial review of the jeopardy assessment.                  
               The District Court subsequently sustained the                          
               determination that P had taxable income of $48,473 in                  
               1997 and found that P had savings of $100,727.                         
                    R determined that the $149,200 seized from Ps was                 
               unreported taxable income for 1997.  Ps contend that it                
               was not taxable income because P-H had a cash hoard in                 
               that amount on Dec. 31, 1996.                                          
                    Ps moved at trial to shift the burden of proving                  
               the amount of the cash hoard to R under sec. 7491(a),                  
               I.R.C.  Ps offered evidence relating to the amount of                  
               P’s cash hoard, but a substantial amount of that                       
               evidence was not credible.                                             

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