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6001 requires taxpayers to maintain books and records. Mr.
Runkle advised Revenue Agent Andrews that he had researched
section 6001 and there was no requirement to file a tax return
under section 6001. Mr. Runkle encouraged Revenue Agent Andrews
to take more time to research what part of the Code made
petitioners subject to taxation. Revenue Agent Andrews declined
Mr. Runkle’s offer. Revenue Agent Andrews testified that he was
intimidated by Mr. Runkle’s questioning on tape in the presence
of four unnamed witnesses.
Revenue Agent Andrews also testified that he concluded,
after the summons conference, that he would need to issue
information request letters to third parties who filed income
information returns with respondent reporting income these third
parties paid to petitioners in 1991, 1992, and 1993. Revenue
Agent Andrews issued summonses on November 2, 1994, to third-
party payors to obtain income and expense information regarding
petitioners.
Petitioners filed a petition with the United States District
Court for the Northern District of Indiana (Indiana Federal
District Court) to quash the summonses issued to the third-party
payors. The Indiana Federal District Court denied petitioners’
petition to quash the summonses issued to the third-party payors.
To save costs, Revenue Agent Andrews agreed that Garrett State
Bank need provide only the deposit items for petitioners’
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Last modified: May 25, 2011