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costs and imposition of sanctions against respondent). The Court
of Appeals for the Ninth Circuit determined that it could not
review this Court’s order and decision because such order and
decision was unaccompanied by a statement of reasons.
Background
Petitioners were born in a farming community in Tonga. In
the late 1970s, petitioners moved to the United States, learned
English, and began a lawn-cutting business. The lawn-cutting
business grew into a landscaping business, Best Landscape and
Brickwork, which relied heavily on the labor of migrant workers,
who received cash payments, and Mr. Liti. Mrs. Liti was in
charge of the administrative aspects of the business. Prior to
assuming those duties, Mrs. Liti worked in the accounting
department of a church where she was responsible for typing
checks and filing. She did not have significant accounting
experience, and her bookkeeping skills were poor. Petitioners
routinely failed to account for certain income and expenses.
By notice dated December 8, 1999, respondent determined
additions to tax and section 66631 penalties in petitioners’ 1995
and 1996 Federal income taxes. At trial, respondent contended
that petitioners, in violation of section 6663, intended to evade
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect at relevant times, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
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Last modified: May 25, 2011