When a taxpayer says that to a RA at Exam in answer to a question why a certain bank account therefore extensively used by his family’s business ceased to be used midyear, then you know ex-Ch J L. Paige (“Iron Fist”) Marvel will be expending somber reasoning and copious citation of precedent to lay fraud penalties on some (but not all) of the family, in the process of hitting them with generous helpings of deficiencies for unreported income, playing put-and-take with multiple (undisclosed) bank accounts, sloppy recordkeeping and shady NOLs, with negligence chops for dessert.

For a tale worthy of Scheherazade, check out Yosef Sehati a.k.a. Joseph Sehati and Lilly Kohanim-Sehati, et al., 2025 T. C. Memo. 3, filed 1/15/25.

There’s Momma’s little box with millions of gemstones unopened for decades, a logbook without an author, disappearing tags on jewelry, and floating bank accounts. See 2025 T.C. Memo. 3, at p. 15, for the title first written at the head hereof.

One point: to show spousal fraud, IRS must show level of sophistication, involvement in business and financial dealings, and lifestyle, preferably of the rich and famous. Here IRS missed building a sufficient record on two spouses.