- 36 -
attributable to Mr. Doxtator's mother were inconsistent and
largely uncorroborated. With respect to the Oneida Tribe
payments in 1999, petitioners disregarded Forms 1099 indicating
that these amounts were taxable. Moreover, petitioners' brief
demonstrates extensive study of statutes, treaties, and caselaw
affecting Native Americans, including the IGRA, yet they
disregarded the specific IGRA provision (25 U.S.C. sec.
2710(b)(3)(D), discussed supra pp. 29-30) that addresses the
taxability of distributions of Indian gaming revenues. Regarding
claimed charitable contribution deductions in 1999, petitioners
did not offer any persuasive reason for their failure to
substantiate the substantial amounts claimed. Finally,
petitioners conceded without further explanation their failure to
report interest income in 1999.
Since we conclude that petitioners had substantial
understatements for 1997 and 1999, we address respondent's
determination of negligence for 2000 only. We are satisfied that
respondent has met his burden of production, and that the
evidence supports a finding of negligence or disregard of rules
or regulations within the meaning of section 6662(b)(1), for all
portions of the underpayment in 2000 except that attributable to
petitioners' liability for self-employment tax on Mrs. Doxtator's
judicial officer compensation in that year. For essentially the
same reasons that we found reasonable cause for petitioners'
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011