[*24]
Respondent issued the notices of deficiency following an examination during which petitioner and Mr. Hovind failed to cooperate with respondent. Because neither petitioner nor Mr. Hovind cooperated during the examination, respondent did not determine how much of the total net income was attributable to petitioner and Mr. Hovind, respectively.
Although petitioner argues otherwise, we find that respondent acted in good faith in issuing the notices of deficiency to both petitioner and Mr. Hovind. On the basis of petitioner and Mr. Hovind’s bank records alone, respondent could not determine whether and to what extent petitioner and Mr. Hovind individually were liable for the unreported net income of CSE. The actions of petitioner and Mr. Hovind in withholding information resulted in respondent’s determination to assign the same income to each of petitioner and Mr. Hovind.[1]
Furthermore respondent seeks a consistent resolution for both petitioner and Mr. Hovind. Respondent concedes that the notices of deficiency are intended to assert alternative deficiencies and that the Commissioner is seeking to tax the
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- ↑ As the U.S. Court of Appeals for the Eighth Circuit noted in Estate of Goodall v. Commissioner, 391 F.2d 775, 782-783 (8th Cir. 1968), vacating T.C. Memo. 1965-154, tax cases often involve substantial sums of money and the Commissioner is charged with protection of the revenues; therefore, “[g]ood faith inconsistency buttressed by acceptable argument, when considered in the framework of the Commissioner’s responsibilities, cannot be regarded as an offense which provides a bar to bona fide tax litigation.”
