Court Opinion

ID: 9467332
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:45:33.483328+00
Date Added: 2024-06-11T17:40:17.479933
License: Public Domain

HARLINGTON WOOD, Jr., Circuit Judge,
dissenting.
The majority, in my opinion, gives the taxpayers an undeserved pass for the income taxes they fraudulently avoided paying.
It appears that Mr. Candela lived in this country for forty years without learning English, but he did learn how to make cheese and money. It is said that the taxpayers were frugal. That is ordinarily a worthy characteristic, but not if you are being frugal by not paying your income taxes.
Taxpayers’ assets rose from about $99,000 to $228,000 between 1966 and 1969. Those assets included various bank accounts, a cheese inventory, savings bonds, accounts receivables, loans, a mortgage, a stockbro*1277ker deposit, real estate stocks, and farm machinery. Even though he could not speak English, Mr. Candela was obviously no babe in the economic woods.
Critical to the case is taxpayers’ claim of $70,000 cash on hand for which the government gave them no credit in the net worth analysis. However, the taxpayers themselves have considerable difficulty trying to explain it. It is admitted by taxpayers in their brief that “[t]he source of the $70,-000.00 cash on hand of the plaintiffs cannot be demonstrated with exactness.” “Doubtless,” it is argued, “plaintiffs saved some cash over a period of forty years.” The plaintiffs sum up their case by arguing that they have “shown a likely source of at least $30,000.00 from their daughter in the years prior to 1967, and a distinct possibility that plaintiffs may have saved or accumulated an additional $40,000.00 in the forty years prior to 1967, due to their abstemious ways.” Those are not very strong or satisfying statements. Taxpayers claim, incidentally, that their cash hoard was kept in a can in the basement, plus in two safe deposit boxes. I am surprised that taxpayers by now have not thought up something original to claim besides just having a can full of money in the basement. These particular taxpayers at least distinguish their explanation by saying that their can full of money in the basement was a milk can, a container of impressive dimensions.
Let us also look at the $30,000 portion of that cash hoard which they attribute to their daughter. It is claimed that the daughter routinely sent a portion of her wages home to her father. Such filial assistance to aging parents can be most laudable. This, however, appears to be an exceptional case. The daughter claims that over a six-year period she sent home $30,-000 of her total income of $38,000, It is also exceptional that she was able to exist on what little she would have had left. The parents were doing very well without the need for such extreme sacrifices by their daughter. I wonder if the daughter realized that her wages were only headed for deposit in the milk can in the basement.
“Dutifully,” it is argued, Mr. Candela took his records to his barber to do his tax returns. What he dutifully delivered, however, were incomplete records which did not reveal at least his additional income from cheese sales on the side and the interest received.
Judge Warren who heard taxpayers’ story firsthand didn’t believe it when weighed against the net worth analysis, and I don’t either.