Opinion ID: 1118224
Heading Depth: 1
Heading Rank: 1

Heading: commission's ruling

Text: The Commission sustained the amended statutory notice of deficiency, which included $122,641 for unpaid taxes, $147,168 in penalties  a 100% penalty for fraud with intent to evade, a 10% penalty for failure to file, and a 10% penalty for failure to pay tax penalty  and $74,610 in interest to the date of the notice. The Commission found that Mr. Jensen had earned substantial amounts of income from Sound Concepts, a business he owned during the deficiency period. This was based on evidence that Mr. Jensen had cashed checks totalling at least $40,719 from the Jefferson Institute, a client of Sound Concepts, and on the testimony of McKinley Oswald, the new owner of Sound Concepts, that after the business was sold in January 1990, gross sales were approximately $23,453 in February and, after the addition of several new clients, $53,514 in March, and $40,403 in April. The Commission found that Mr. Jensen had kept no records indicating the income realized from Sound Concepts, and because the Jensens had not produced evidence to the contrary, the Commission affirmed the tax deficiency. The Commission affirmed the penalty against the Jensens for failure to file because no returns were filed for the years 1979 to 1988 and because the incomplete return filed for 1978 did not constitute a filing. The Commission affirmed the additional penalty for failure to pay penalties because the Jensens simply had not paid them. Finally, the Commission affirmed the penalty for fraud with intent to evade, holding that the evidence showed the Jensens had the specific intent to evade tax and had committed fraud by intentionally failing to file returns as required by statute and failing to maintain adequate records documenting their income.