Frank H. and Marla C. Black - Page 12

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               Frank Black, Inc., did not have any bank or other accounts             
          during 1992.  Frank Black, Inc., did not conduct any business               
          during 1992.  All of petitioners’ existing accounts remained in             
          their individual names.  All interest paid on petitioners’                  
          accounts was earned by petitioners individually.                            
               During the examination conducted for the taxable years 1979            
          through 1981, Mr. Black refused to discuss the large deductions             
          claimed for alleged contributions to the Universal Life Church              
          (ULC).  In addition, he refused to provide any substantiation in            
          order to verify the secretarial expense and the casualty loss               
          claimed on the returns and stated that the agent had no authority           
          to ask any personal questions.                                              
               When questioned by Agent Helton during the initial interview           
          for the examination of petitioners’ 1987 through 1989 tax years,            
          Mr. Black generally was unresponsive and evasive.                           
               During Agent Helton’s initial interview, Mr. Black told her            
          that petitioners had not acquired any assets during the years               
          1987 through 1989, even though they had acquired assets,                    
          including several automobiles.                                              
               On their joint returns for the taxable years 1987, 1988, and           
          1989, petitioners deducted $22,350, $13,125, and $13,250,                   
          respectively, for their alleged contributions to “New Faith                 
          Baptist Church” (NFBC).  Respondent disallowed all of the                   

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