Dennis E. Runkle and Debra A. Runkle - Page 24

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               3.   Failing To Maintain Adequate Records                              
               A taxpayer’s destruction of books and records of his or her            
          income-producing activity further demonstrates a willful attempt            
          to defeat and evade taxes.  Spies v. United States, 317 U.S. at             
          499; Toushin v. Commissioner, 223 F.3d 642, 647 (7th Cir. 2000),            
          affg. T.C. Memo. 1999-171.  Mr. Runkle failed to maintain books             
          and records for any of his income-producing activities for the              
          years at issue.  In fact, Mr. Runkle testified he regularly threw           
          away his records of income and expenses once he determined                  
          whether he had a profit or loss or upon balancing his checkbook.            
          While Mr. Runkle maintained check registers for the years at                
          issue, he threw them away after he balanced the checkbook.                  
          Likewise, Mrs. Runkle destroyed her books and records for the               
          Canyon Kennel for the years at issue.  While she briefly retained           
          check registers for the kennel activity, she also threw away                
          these records.  She testified that she threw away the bank                  
          statement after she balanced the checkbook during the years at              
          issue.  Through these actions, respondent argues, and we agree,             
          that petitioners sought to conceal their income tax income                  
          liability and succeeded in delaying respondent’s determination              
          for the years at issue.  Petitioners’ conscious decisions not to            
          maintain books and records, coupled with their individual                   
          decisions to destroy any available records, demonstrates their              

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