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requested documentation until after the notice of deficiency was
sent to them. The documentation eventually provided by
petitioners was inadequate, leaving the IRS to depend
substantially on the records of third parties in the course of
its audit of petitioners. Petitioners knew that there was
insufficient documentation to support the figures entered on
their tax returns, they failed to cooperate with the IRS’s
multiple requests for interviews, and they presented no plausible
explanation, written or oral, regarding their computation of
their tax liabilities for the years in issue. Petitioners’
refusal to cooperate with respondent in determining their correct
tax liability (until this case was being prepared for trial) is a
further indication of fraud. Bradford v. Commissioner, supra at
307.
Mrs. Fuller provided Greenfield, who prepared petitioners’
tax returns for the years in issue, with totals for gross
receipts, costs of goods sold, and other expenses to be used for
preparing returns for the tax years in issue, but she did not
provide him with any information regarding how the figures she
provided were calculated or with substantiating documentation
other than some contracts for the purchase of equipment.
Petitioners still have not provided to the IRS or to this Court
any plausible explanation of how they arrived at the figures
reported on their tax returns or how the misstatements occurred.
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Last modified: May 25, 2011