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time, petitioner was not filing tax returns because he was no
longer earning any money.
Mr. Chivers told petitioner that he had to file a 1989
income tax return. Petitioner advised Mr. Chivers that he had no
books or records, and he did not recall how much money he earned
in 1989. Mr. Chivers instructed petitioner to estimate on the
high side and report an amount large enough to cover the amount
petitioner had earned. Mr. Chivers informed petitioner that he
could go to jail if he did not file a return for 1989.
Petitioner prepared an income tax return for 1989 (1989
return). The only entries on the 1989 return were: Petitioner
listed two of his children as dependents; line 7, Wages,
salaries, tips, etc., has $1 million written in and scribbled
out; line 12, Business income, lists $5 million; line 31,
adjusted gross income, lists $5 million; page 2 is blank except
for petitioner’s signature, the date is listed as “9/19/91”, and
petitioner’s occupation is listed as unemployed; and the Schedule
C, Profit or Loss From Business, lists $5 million of gross
receipts or sales, no cost of goods sold, and no expenses.
Petitioner listed $5 million in income on the 1989 return because
he was drunk, he was intimidated by Mr. Chivers, and he did not
want to go to jail.
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