- 7 - tickets, revised his determinations relating to 1984, 1985, 1986, 1988, 1989, 1991 and 1992. The increases in the deficiencies totaled $145,010, the additions to tax totaled $41,028.40, and the penalties totaled $1,820.60. With respect to 19832 and 1987, respondent determined decreases in the deficiencies totaling $5,935 and additions to tax totaling $4,875.75. On September 25, 1996, petitioners, while residing in Longwood, Florida, filed petitions with this Court. On April 29, 1997, the Court granted their motion to consolidate the two cases. OPINION I. Burden of Proof Petitioners contend that the direct and indirect income reconstruction methods that respondent used to determine the deficiencies in his notices were arbitrary and excessive. We disagree. David had a duty, but failed, to maintain adequate financial records relating to most of the years in issue. Sec. 6001; sec. 1.6001-1(a), Income Tax Regs. Accordingly, respondent’s use of the direct and indirect income reconstruction 2 At trial respondent discovered that the revised deficiency for 1983 in his amendment to answer should have been increased rather than decreased. In his brief, respondent asks the Court to rely on the original deficiency in the notice relating to 1983. We grant respondent’s request on brief because it does not prejudice petitioners (i.e., petitioners were put on notice of the deficiency and additions to tax, and the request does not raise any new issues). See Rule 41(a); Foman v. Davis, 371 U.S. 178, 182 (1962).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011