Dennis E. Runkle and Debra A. Runkle - Page 21

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          became involved in what he considers “mainstream” tax planning              
          and promoted the sale of income and estate tax planning programs            
          using partnerships, wills, living trust, and other legal                    
          instruments.  As further evidence of Mr. Runkle’s financial                 
          expertise, Mr. Runkle also formed DR Financial, Inc. to promote             
          the sale of insurance and annuities and served on a church’s                
          financial commission.  In addition, Mrs. Runkle successfully                
          operated the Canyon Kennel as a sole proprietorship for many                
               A taxpayer’s filing of income tax returns in prior years is            
          evidence that the taxpayer was aware of his or her obligation to            
          file returns.  Petzoldt v. Commissioner, 92 T.C. 661 (1989); see            
          also Stalker v. Commissioner, T.C. Memo. 1981-544.  Petitioners             
          had a history of consistently filing income tax returns and                 
          paying the tax liability before the years in issue.  The last               
          year for which they filed a return, 1990, petitioners had a                 
          Federal tax liability of $13,467, which they timely paid with               
          funds borrowed from Garrett State Bank.  Thereafter, petitioners            
          embarked on a course to avoid disclosing and paying their Federal           
          tax liability.  This occurred after petitioners attended a                  
          seminar in Cancun, Mexico, and bought the “untaxing” propaganda             
          of the American Institute that established petitioners’ “firm               
          belief” there was no requirement to file returns.                           

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