- 2 - petitioners’ 1994, 1995, 1996, and 1997 Federal income taxes. The issues for decision are whether petitioners received unreported income and are liable for the section 6663(a)1 fraud penalty. FINDINGS OF FACT Petitioners married on April 14, 1990, and remained married from 1994 through 1997 (i.e., the years in issue). Prior to meeting Ruth A. Jenkins, James E. Jenkins (petitioner) made a modest living in the flea market business. Mrs. Jenkins was a successful businesswoman and sole owner of Salvage Brokers, Limited, Inc. (Salvage Brokers), an auction and salvage business. Petitioner and Mrs. Jenkins were president and secretary, respectively, of Salvage Brokers. During the years in issue, petitioners went on various gambling trips to Las Vegas, Nevada, and Tunica, Mississippi, would typically take $1,500 for gambling purposes, and had gambling losses in excess of their winnings. Petitioner and Robert Hood were partners in ARJay Rentals (ARJay). Petitioner and Hood, through ARJay, assisted charities in organizing and operating bingo games. In exchange for their services, the charities agreed to lease building space in which to conduct the bingo games, purchase bingo equipment (e.g., bingo cards), and split a percentage of the net profits with petitioner and Hood. ARJay’s receipt of a percentage of the net profits 1 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue.Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011