- 24 - 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 theirPage: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
Last modified: May 25, 2011