Dennis E. Runkle and Debra A. Runkle - Page 17

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          proclaimed that they want to again participate in the Federal               
          income tax system.                                                          
               We note that their wish to reenter is not without                      
          conditions, however.  Instead, they have set their own terms for            
          reentry.  First, their terms of reentry include absolving them              
          from the fraudulent failure to file addition under section                  
          6651(f) and rather finding them liable for the failure to file              
          addition under section 6651(a)(1).  Second, Mr. Runkle seeks                
          additional business deductions, which he cannot substantiate.               
          Third, petitioners ask us to absolve them of the addition to tax            
          for failure to pay estimated taxes under section 6654(a) even               
          though petitioners failed to produce any evidence challenging               
          respondent’s determinations.  In essence, petitioners, having               
          conceded respondent’s deficiency determinations, now condition              
          their reentry to the Federal tax system on their own terms, not             
          those by which all other taxpayers must comply.                             
               We begin with whether petitioners’ failure to file Federal             
          income tax returns was fraudulent under section 6651(f).  We then           
          decide whether Mr. Runkle is entitled to business expenses in               
          excess of those allowed by respondent in the deficiency notice,             
          and then whether petitioners are liable for the estimated tax               
          addition under section 6654(a).                                             

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