In Uncategorized on 10/18/2018 at 17:16

More than a couple times (hi, Judge Holmes) have I torn up tickets on the leader at the top of the stretch who never quite got there at the wire. Sometimes it was accompanied by just a sigh; other times, it featured imprecations hurled to the heavens, excoriating owner, trainer, jockey, stablehands, dam, sire, and the track announcer. But at the end, it was just another loss.

Well, I feel that way today, although I send no imprecations to the Glasshouse crew, and only my deepest respects to STJ Daniel A. (“Yuda”) Guy, who presided at today’s off-the-bencher, Xiangcun Shi, Docket No. 6852-17S, filed 10/18/18.

First, the post parade.

X e-filed a detailed 1040, with schedules, showing all kinds of numbers for his “international sales” business. The return featured his name, SSAN, address and phone number. The tax due stated therein was paid by credit card.

It wasn’t clear from the record who prepared same, but IRS small-d (this is a nonpolitical blog) democratically issued a SNOD, disallowing deductions in all directions.

X timely petitions.

Now the bell sounds, and X leaps from the starting gate, as the Taishoff no-prize, best-excuse sweepstakes is off.

“Petitioner alleged in the petition and asserted at trial that the tax return in question was totally fabricated, that he did not work or otherwise conduct any trade or business in [year at issue], and that the tax return was filed without his knowledge to ‘trap’ him.” Transcript, at p. 5.

X claims he graduated college in China, came to the US and ran a travel business for 10 years, filing returns all the while, and then retired. In the year at issue, he was supported by his “affluent daughter” in China (a consummation devoutly to be wished), who apparently bankrolled X’s trips to the homeland that year to care for his aging parents. And, while there, he apparently attended various health and wellness seminars, all paid for by said daughter.

Now we come to the top of the stretch.

“Petitioner testified that on one of his trips to China in [year at issue], his girlfriend had suggested that he meet with an individual in Beijing who might assist him in obtaining U.S. citizenship. Petitioner says he met with the unnamed individual who told him that he should file a Federal income tax return to enhance his chances of gaining U.S. citizenship. Petitioner further testified that he provided this individual with personal information, including his social security number and credit card information. Finally, petitioner testified that the individual later became unhappy with him after he rejected the individual’s request for a loan. Petitioner failed to identify the individual in question.” Transcript, at p. 6.

X claims the unnamed person filed the phony return. Now, while there are many bogus returns filed by identity thieves fraudulently seeking refunds, I’ve yet to hear of an identity thief who pays taxes in someone else’s name.

Still, X is leading in the stretch.

We come to the wire.

“Although petitioner asserts that the tax return was a fabrication, he nevertheless offered a few receipts in an attempt to substantiate some of the expenses claimed on Schedule C. The Court finds that petitioner did not present any objective evidence to corroborate his testimony that the tax return was a complete fabrication. There would seem to have been a number of avenues available to petitioner to provide his case, but he offered the Court nothing but his own self-serving testimony.” Transcript, at p. 8.

STJ Yuda, it’s hardly fair to call testimony “self-serving” when the witness stipulates in evidence that totally destroys the witness’ own case. However, see my blogpost “A Joy Forever? – Not Hardly,” 3/31/14, where distinguished counsel did just that.

So X fades to also-ran status. “The receipts attached to the stipulation of facts bear no discernable relationship to the professional and legal expenses in dispute. On this record, respondent’s determination that petitioner is liable for a Federal income tax deficiency is sustained.” Transcript, at p. 9.

Too bad. I had high hopes for X.

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