James G. and Elaine A. Wanchek - Page 11




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          more than weak circumstantial evidence buttressed by scant                  
          allegations.                                                                
               Petitioners’ case is not novel.  This Court has addressed              
          similar issues in a number of cases.  For the most part, as in              
          this case, the Court has found against taxpayers on the basis               
          that they had not proven that the contractors acted with the                
          requisite intent to constitute a theft crime.  See Friedman v.              
          Commissioner, T.C. Memo. 1992-588, affd. without published                  
          opinion 48 F.3d 535 (11th Cir. 1995); Schneider v. Commissioner,            
          T.C. Memo 1981-603; Godine v. Commissioner, T.C. Memo. 1977-393;            
          Price v. Commissioner, T.C. Memo. 1971-323.                                 
               The few cases in which this Court has allowed theft loss               
          deductions involved contractors who took money from taxpayers               
          under false pretenses and then either absconded or ceased                   
          construction and used the money for purposes not related to the             
          construction agreement.  See Norton v. Commissioner, 40 T.C. 500            
          (1963), affd. 333 F.2d 1005 (9th Cir. 1964); Miller v.                      
          Commissioner, 19 T.C. 1046 (1953); see also Hartley v.                      
          Commissioner, T.C. Memo. 1977-317.  Mr. Green did not take                  
          petitioners’ money and run.  To the contrary, although the                  
          quality of the construction was not what petitioners had                    
          bargained for, Mr. Green completed the job and made some repairs.           
          The circumstantial evidence does not demonstrate that Mr. Green             
          ever intended to defraud petitioners.  Nor is our conclusion                







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