Portal:United States Tax Court

“ A pattern of substantially underreporting income for several years is strong evidence of fraud, particularly if the reason for the understatements is not satisfactorily explained or due to innocent mistake. ”

“ Petitioner’s responsibilities included maintaining records for payroll, vacation pay, and benefits; [20] paying all ministry bills; collecting rent; providing financial data to Mr. Hovind for future planning; keeping the buildings clean and supplied; and keeping in contact with Mr. Hovind to make decisions in his absence. During the years at issue petitioner also reconciled the bank statements for account 8656. She met with Mr. Hovind weekly to keep him informed of CSE’s financial status, including current figures for bank deposits, loans, payroll expenses, and merchandise sales. ”

“ Hovind alone is responsible for CSE’s income. Petitioner also contends that she neither earned nor was responsible for the unreported income and therefore respondent acted erroneously in attributing the unreported income to petitioner. ”

“ Collateral estoppel is a judicially created equitable principle the purposes of which are to protect parties from unnecessary and redundant litigation, to conserve judicial resources, and to foster certainty in and reliance on judicial action. ”

“ Commissioner, 75 T.C. 1, 20 (1980) . Although we consider the taxpayer's level of expertise, a taxpayer is not excused from keeping accurate records when the taxpayer has experience operating his or her own business. Korecky v. Commissioner, 781 F.2d 1566, 1569 (11th Cir. 1986) , aff'g T.C. Memo. 1985-63.
In a letter attached to her untimely filed returns, petitioner wrote: "I have not kept financial records, as I did not know that I needed to do so." Petitioner introduced no records of her income and did not substantiate the amounts she claimed as income on her tax returns. ”

“ Hovind signed a quitclaim deed on behalf of himself and the Faith Baptist Fellowship allegedly transferring the 400 Cummings Road property to the “400 Block Cummings Subdivision Trust, a Ministerial Property Trust, its trustee being Director of Ecclesiastical Enterprises”. ↑ On August 18, 2004, petitioner and Mr. Hovind signed a quitclaim deed conveying the 5720 North Palafox property to the “5720 N. Palafox Trust, a Ministerial Property Trust, its trustee being Director of Ecclesiastical Enterprises”. ”

“ Hovind acquired by warranty deed property at 29 Cummings Road (29 Cummings Road property) which they used as their personal residence during the years at issue.
II. Founding of CSE
Mr. Hovind established CSE in 1989. [4] CSE purported to be a nondenominational religious organization that advocated the message of creation science and opposed the theory of evolution. CSE promoted its message through live lectures by Mr. Hovind and Eric Hovind. Mr. Hovind frequently traveled, domestically and internationally, for speaking engagements, and petitioner occasionally accompanied Mr. ”

“ Tit. 31 U.S.C. sec. 5324 (d) (2006) imposes a criminal penalty of a fine, imprisonment, or both against an individual who structures transactions to evade reporting requirements. ↑ Mr. Hovind was indicted on 45 counts of structuring monetary transactions to avoid reporting requirements, 12 counts of willfully failing to deduct and pay Federal income and withholding taxes for employees of CSE, see sec. 7202, and 1 count of obstructing the administration of the internal revenue laws, see sec. 7212 (a) . The jury found Mr. Hovind guilty on all counts. ”

“ She does not address whether she complied with the substantiation requirements or maintained all required records. ↑ Revenue Agent AlyceFaye credibly testified that she eliminated from taxable income the items she identified as nontaxable, such as interaccount transfers or returned checks. ↑ In support of her argument petitioner also cites the transcript of her own sentencing proceedings before the U.S. District Court. ”

“ Hovind deposited the inheritance into a CSE account. ↑ For example, petitioner drafted and signed checks made payable to J.C. Penney and Circuit City. ↑ In 2000 petitioner drafted and signed checks drawn on account 8656 for Kent Andrew Hovind’s and Marlissa Hovind’s medical expenses. ↑ Petitioner and Mr. Hovind also lent Eric Hovind approximately $50,000 from a CSE account. ↑ Petitioner was indicted on the basis of the checks she had drafted to cash and endorsed. Tit. 31 U.S.C. sec. 5324 (a) (3) (2006) prohibits an individual from structuring a transaction to avoid a cash transaction report. ”