- 10 - reduced their reported tax liabilities to zero.10 The losses from the partnership activities for 1982 and 1983 were largely attributable to the Far West Drilling deductions. The joint return for 1982 showed a Far West Drilling partnership deduction of $83,402. The joint return for 1983 showed a Far West Drilling partnership deduction of $91,086 and a depletion deduction of $2,126. Those amounts far exceeded other partnership deductions which were claimed in the joint returns. Petitioner, at the very least, understood the general concepts of Federal income taxation,11 and she demonstrated to us no discernible difficulty in understanding English. Petitioner was involved in the audit process with respect to the 1982 and 1983 joint returns. At some point during the Internal Revenue Service (IRS) audit of those returns, petitioner and Mr. Hopkins were represented by John E. Lahart.12 Mr. Lahart spoke with petitioner on more than one occasion, and he testified that she 10However, in prior years, petitioner and Mr. Hopkins reported relatively large tax liabilities, $24,229 in 1978 and $22,684 in 1979, but reported insignificant partnership deductions. 11An individual cannot rely solely on ignorance of the attendant tax or legal consequences of an item giving rise to a deficiency to satisfy his or her burden under sec. 6015(b)(1)(C). See Price v. Commissioner, 887 F.2d 959, 964 (9th Cir. 1989). 12Petitioner and Mr. Hopkins signed a Form 2848, Power of Attorney and Declaration of Representative, dated Sept. 22, 1988, in which they appointed Mr. Lahart to represent them before the Internal Revenue Service (IRS).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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