Tuesday, April 10, 2007
This doesn't happen every day: the Tax Court yesterday decided that a lawyer and his client were each liable for failing to file their tax returns:
- Olmos v. Commissioner, T.C. Memo. 2007-82 (4/9/07): A California dentist received Forms 1099-MISC reporting over $75,000 in payments from over a dozen health insurance companies for dental services provided to plan subscribers but did not file a tax return. The Tax Court upheld the Service's assessment of taxes, interest and penalties in the face of a less than vigorous defense by the taxpayer's counsel, George E. Harp:
When petitioner’s case was called for trial on March 31, 2006, petitioner did not appear. Instead, George E. Harp (Mr. Harp) appeared on petitioner’s behalf, and the Court filed Mr. Harp’s entry of appearance. Although Mr. Harp offered no evidence at trial regarding petitioner’s unreported income, Mr. Harp objected to all but one of respondent’s exhibits. After hearing argument on the objections, we overruled petitioner’s objections and admitted the exhibits.
(Mr. Harp had unsuccessfully tried the same non-defense in Heers v. Commissioner, T.C. Memo. 2007-10 (1/16/07):
When petitioner’s case was called for trial on March 7, 2006, petitioner’s attorney appeared, but petitioner did not. Although petitioner’s attorney offered no evidence at trial, he objected to three of respondent’s exhibits. After hearing argument on the objections, we overruled petitioner’s objections and admitted the exhibits.)
- Harp v. Commissioner, T.C. Memo. 2007-83 (4/9/07): Mr. Harp failed to file tax returns for 1995-2000. The Tax Court granted the government's motion for summary judgment and assessed taxes, interest, and penalties against Mr. Harp:
During the examination of the years at issue, petitioner submitted tax returns reporting all zeroes and attached documents entitled “Asseveration of Claimed Gross Income” and “Statement and Asseveration of Exclusion of Remuneration from Gross Income”. In the returns and attachments, petitioner argued that his income was not includable in gross income and raised various tax-protester arguments. After respondent received petitioner’s returns, respondent used the bank deposits method to reconstruct petitioner’s income.