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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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