- 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