Marianne Hopkins - Page 12

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          testify on her behalf in that proceeding.  Also, she was the                
          person who dealt with the insurance company after it initially              
          denied coverage for the loss of her house in 1982.                          
               The record reflects that petitioner dealt with third parties           
          with respect to her family’s financial, tax, and legal matters.             
          For example, respondent’s revenue officer who was assigned to the           
          collection of the income tax liabilities of petitioner and Mr.              
          Hopkins testified that, except for one occasion, he dealt almost            
          exclusively with petitioner.  When he would request information             
          or a response from petitioner and Mr. Hopkins, it was always                
          petitioner who would respond.                                               
               Petitioner performed numerous financial functions within her           
          family, exercised considerable discretion, and was ultimately               
          responsible for the family’s principal asset, the house at 111              
          Diablo Drive.  She spent considerable sums in remodeling the                
          house before 1982 and in rebuilding the house after the mudslide            
          in 1982.14  Petitioner directed the remodeling and rebuilding.              
          She hired contractors, and she paid those individuals by check or           
          in cash.                                                                    
               Given the size of the partnership deductions, the change in            
          petitioner and Mr. Hopkins’s reported taxes in 1980, 1982, and              
          1983, and petitioner’s involvement in the family’s financial                

               14The rebuilt residence included four bedrooms and four                
          baths and occupied 4,976 square feet with a four-car, 920-square-           
          foot carport.                                                               

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