Dennis E. Runkle and Debra A. Runkle - Page 6

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          once.”  Petitioners then sent an additional letter on May 27,               
          1993, to respondent’s Cincinnati Service Center advancing other             
          frivolous, tax-protester type arguments.  In this letter,                   
          petitioners declared that they were not taxpayers under the Code            
          and dismissed the sections cited by respondent as not being                 
          “positive law.”                                                             
               Petitioners did not conduct any independent research to                
          support the statements in petitioners’ letters to respondent.               
               Petitioners maintained contact with the American Institute             
          from March 1992 through at least 1995.  In the course of                    
          petitioners’ dealings with respondent, both administratively and            
          judicially, the American Institute provided petitioners with                
          rebuttal arguments to respondent’s positions.                               
          Tax Planning Activities                                                     
               Sometime between 1990 and 1993, Mr. Runkle met certified               
          public accountant William Boeykens (Mr. Boeykens) for what Mr.              
          Runkle characterized as “mainstream tax planning” using                     
          partnerships, living trusts, and “pour-over” wills.  Mr. Runkle             
          and Mr. Boeykens3 promoted and sold these partnership packages as           
          an income tax and estate tax planning program to their clients              
          during 1992 through 1995.  Mr. Runkle used his knowledge of                 

               3Mr. Boeykens advised Mr. Runkle that he was “crazy” for               
          becoming involved in the American Institute’s “untaxing service.”           
          Despite this advice, petitioners did nothing to “undo” their                

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