A Not So Innocent Spouse (Jo Delia Hovind)

[jcolvin2]

http://www.ustaxcourt.gov/InOpTodays/Ho ... CM.WPD.pdf

[LPC]

New citation/link:

T.C. Memo. 2012-281

[NYGman]

Mr. and Ms. Dinosaur

This is the florida Family that is all sorts of crazy. I think they run a Dinosaur park, and believe the world is 6000 yrs old, and Dinosaurs and humans played together. Carbon Dating is unreliable, the Grand Canyon was caused by the great flood, and anything not in line with their theory is obviously just another way god tests faith. This is before you ever get to their odd tax positions.

[LPC]

What's interesting to me about the opinion is that much of the evidence of fraud (to support the civil fraud penalties) were actions that Jo took after learning that she was the subject of an IRS investigation.

Respondent contends that the following factors are present in this case: (1) petitioner understated her income for the years at issue; (2) petitioner failed to maintain adequate records for the years at issue; (3) petitioner offered implausible or inconsistent explanations with regard to her role at CSE and her recordkeeping during the years at issue; (4) petitioner concealed income and assets for the years at issue; (5) petitioner failed to cooperate with tax authorities regarding the years at issue; (6) petitioner engaged in, and concealed, illegal activities during the years [*47] at issue; (7) petitioner failed to timely file returns for the years at issue; and (8) petitioner engaged in extensive dealings in cash during the years at issue.47

a. Understating Income

A pattern of substantially underreporting income for several years is strong evidence of fraud, particularly if the reason for the understatements is not satisfactorily explained or due to innocent mistake. See Holland, 348 U.S. at 137139; Spies, 317 U.S. at 499; Webb v. Commissioner, 394 F.2d at 379.

On her untimely filed returns, petitioner reported taxable income of $9,194, $9,199, $8,972, $8,749, $9,418, $9,145, $9,495, $8,564, and $7,257 for 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, and 2006, respectively. Respondent determined that petitioner underreported her taxable income by $269,668, $459,894, $456,154, $370,739, $374,175, $356,994, $702,009, $786,846, and $386,706 for 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, and 2006, respectively. We have found that petitioner is responsible for 50% of the net profit attributable to CSE, 50% of the income attributable to deposits into joint accounts, and 100% of the income attributable to deposits into her personal [*48] account. Petitioner failed to report over 90% of her total taxable income for each of the years at issue.

We find that petitioner substantially underreported her income for 1998-99 and 2000-06. Given the amount of her underreporting, her pattern of underreporting income, and her lack of any satisfactory explanation for underreporting, petitioner's understatements are persuasive evidence of fraudulent intent.

The returns were "untimely" because they were not filed until *after* the IRS had conducted its civil investigation. From earlier in the opinion:

VIII. Civil Examination

In 2007 respondent began an examination in respect of petitioner and Mr. Hovind. IRS Revenue Agent AlyceFaye was assigned to petitioner's case. Revenue Agent AlyceFaye mailed petitioner a letter requesting that petitioner [*17] contact her. She also attempted to contact petitioner via telephone but received no response. Revenue Agent AlyceFaye eventually held a telephone conference with petitioner and an individual representing himself as petitioner's attorney. During the call Revenue Agent AlyceFaye informed petitioner that she had no records of petitioner's filing tax returns for 1998-99 and 2000-06. Petitioner repeatedly stated that she did not have any taxable income and therefore was not required to file returns for those years.

Petitioner did not provide any records or other information to respondent either before or after the telephone conference. Consequently, respondent used the records seized during the criminal investigation to conduct the examination for petitioner's 1998-99 and 2000-04 tax years and summoned bank records to conduct the examination for petitioner's 2004-06 tax years.30

IX. Petitioner's Tax Reporting and the Notice of Deficiency

Petitioner and Mr. Hovind did not file joint Federal income tax returns for the years at issue. In response to respondent's examination and after respondent's issuance of a so-called 30-day letter, petitioner, on September 5, 2008, untimely filed tax returns for the years at issue.

The third "badge of fraud," Jo's "implausible or inconsistent explanations," is based on her own testimony before the Tax Court:

c. Implausible or Inconsistent Explanations

A taxpayer's implausible or inconsistent explanations for his or her actions may constitute circumstantial evidence of fraudulent intent. See Bradford v. Commissioner, 796 F.2d at 307-308; Bahoric v. Commissioner, 363 F.2d 151, 153 (9th Cir. 1966); Gagliardi v. United States, 81 Fed. Cl. 772, 784 (2008). A taxpayer's filings and testimony may provide evidence of implausible or inconsistent explanations. See Goldston v. Commissioner, T.C. Memo. 2011-9, slip op. at 8-9.

Petitioner gave implausible and inconsistent explanations for her conduct throughout the trial and on brief. She testified that she wrote checks only at the direction of Mr. Hovind but later testified that Mr. Hovind frequently traveled and that she had implied permission to write checks. She also testified that she merely signed blank checks and that Ms. Harris was the individual primarily responsible for drafting the checks. At trial, however, petitioner acknowledged that she drafted and signed numerous checks drawn on CSE's accounts.

[*50] Petitioner repeatedly asserted that she had little to no involvement with the operation of CSE, although the record is replete with evidence that petitioner worked at CSE in a managerial capacity and acted as coowner of the business with Mr. Hovind. Petitioner continued to refer to CSE's payment of her personal expenses as nontaxable "love offerings" although she filed returns acknowledging that some part of those payments was taxable as income to her.

Finally, petitioner argues that she lacked the intent to evade tax and therefore we cannot find her liable for the civil fraud penalties. She points to the fact that she filed amended returns once she was made aware of her Federal filing obligations. Petitioner also contends that any fraudulent intent during the years at issue was attributable to Mr. Hovind. However, we find that it is more reasonable to infer from petitioner's course of conduct that her true intention was to conceal substantially all of her income and to take her chances that the fraud would not be discovered. Our finding is supported by the fact that she did not amend her returns until after respondent began a civil investigation in respect of her. Furthermore, the record shows that petitioner was an active participant in the operation of CSE and, along with Mr. Hovind, engaged in a course of conduct designed to conceal and mislead. Petitioner's assertion of implausible and inconsistent explanations is circumstantial evidence of her fraudulent intent.

She also tried to conceal assets *after* learning that she was being investigated by the IRS, and failed to cooperate with the IRS in its investigations.

d. Concealing Assets or Income

An intent to evade tax may be inferred from "concealment of assets or covering up sources of income". Spies, 317 U.S. at 499. Engaging in transactions likely to mislead or conceal is evidence of fraudulent intent. Id.; see also Simco Auto. Pump Co. v. Commissioner, T.C. Memo. 1999-235, slip op. at 18-19, aff'd without published opinion, 238 F.3d 422 (6th Cir. 2000). A taxpayer's use of a business to conceal the personal nature of expenses is evidence of fraud. See Benes v. Commissioner, 42 T.C. 358, 383 (1964), aff'd, 355 F.2d 929 (6th Cir. 1966); Evans v. Commissioner, T.C. Memo. 2010-199, slip op. at 13; Romer v. Commissioner, T.C. Memo. 2001-168, slip op. at 45-46.

During the years at issue petitioner and Mr. Hovind acquired property using funds in CSE's accounts. While some properties initially were titled in petitioner's and Mr. Hovind's names, other properties initially were titled in Mr. Hovind's name alone or in CSE's name. Petitioner and Mr. Hovind titled the properties in different names even though they used their shared funds to purchase the properties and petitioner drafted and signed checks to purchase the properties.

Through a series of transactions, petitioner and Mr. Hovind purportedly transferred the properties to the Faith Baptist Fellowship and later to various ministerial trusts. Petitioner signed many of the documents that purported to [*52] transfer, for little to no value, properties she and Mr. Hovind had purchased. The dates of transfer coincide with actions and inquiries by respondent with respect to petitioner, Mr. Hovind, and CSE.

While petitioner signed documents purportedly transferring the properties, she and Mr. Hovind continued to occupy, control, and rent the properties. Furthermore, the District Court found that petitioner maintained ownership interests in all of the properties purportedly transferred to the ministerial trust. Respondent introduced evidence that petitioner willfully concealed these assets from the IRS.

Additionally, petitioner wrote checks drawn on CSE's accounts to herself, to her children, and to cash. She used the funds in CSE's accounts to pay personal living expenses for herself and her family members, thereby disguising her personal expenses as business expenses. See, e.g., Romer v. Commissioner, T.C. Memo. 2001-168, slip op. at 45-46.

We find that petitioner concealed income by engaging in purported transactions to transfer properties and by using business bank accounts to pay her personal living expenses.

[*53] e. Failing To Cooperate With Tax Authorities

Failure to cooperate with revenue agents during an investigation is a badge of fraud. See Korecky v. Commissioner, 781 F.2d at 1568-1569; Lord v. Commissioner, 525 F.2d 741, 747-748 (9th Cir. 1975), aff'g in part, rev'g in part 60 T.C. 199 (1973); Grosshandler v. Commissioner, 75 T.C. at 20. Such failure is persuasive evidence of a taxpayer's guilty knowledge. See Prof'l Servs. v. Commissioner, 79 T.C. 888, 932-933 (1982).

With respect to respondent's criminal investigation, petitioner testified that she copied all bank records, payroll records, and bank statements and delivered them to Special Agent Schneider. Petitioner further testified that she did not know how much cash was on the premises when Special Agent Schneider arrived to conduct his investigation and that she did not have access to the cash on the premises. With respect to respondent's examination, petitioner testified that she was not contacted by anyone from the IRS concerning her personal income tax until July 2008. Petitioner testified that she attempted to cooperate with Revenue Agent AlyceFaye's investigation and that Revenue Agent AlyceFaye did not specifically request that petitioner provide any records.

Although petitioner testified that she cooperated with respondent's revenue agents, we find petitioner's testimony to be self-serving and not credible. In [*54] contrast, respondent introduced credible evidence that petitioner provided no records to Special Agent Schneider and that petitioner misled Special Agent Schneider about the amounts of, and her access to, cash hoards at the 29 Cummings Road property.48 Respondent also introduced credible evidence that petitioner and her attorney attempted to impede Revenue Agent AlyceFaye's civil investigation of petitioner.49 Petitioner attempted to cooperate with respondent only after she had already exerted considerable resistance to respondent's collection efforts. See Powell v. Granquist, 252 F.2d 56, 61 (9th Cir. 1958). Petitioner's failure to cooperate with tax authorities is indicative of fraud.

It's foolish to think you can get away with not paying taxes, but to try to stonewall the IRS, cover up what you've been doing, and lie about what you were doing or why, is stupid beyond belief.

[LPC]

Mr. and Ms. Dinosaur

This is the florida Family that is all sorts of crazy.

There's a page on Kent Hovind in the Tax Protester Dossiers.

I should add information on Jo, but don't have time right now.

[wserra]

Mr. and Ms. Dinosaur

That's "Dr." and Ms. Dinosaur to you, buddy.

After all, Hovind received a doctorate from some unaccredited diploma mill called "Patriot University". What more do you want?

[NYGman]

Mr. and Ms. Dinosaur

That's "Dr." and Ms. Dinosaur to you, buddy.

After all, Hovind received a doctorate from some unaccredited diploma mill called "Patriot University". What more do you want?

I didn't want to give him that unearned honorific, What ever he wants to be called, he is still a total raving loon*...



*[In no way is my loon comment directed at, or meant to be construed negativly against http://www.omrlp.com/]

[The Observer]

Mr. and Ms. Dinosaur

That's "Dr." and Ms. Dinosaur to you, buddy.

After all, Hovind received a doctorate from some unaccredited diploma mill called "Patriot University". What more do you want?

Hey, they don't get any serious street cred from me until I see their Constipational Ranger badge.

[Paths of the Sea]

Look at that!

I skip a day checking on that case and miss it!

I'm glad to see it, even if I am a day behind in finding out about it.

It's just too bad that it has taken about 20 years to get this far with the Hovinds.

Sincerely,
Maury Enthusiast!

[Paths of the Sea]

Peter J. Reilly at Forbes has posted a column on the case. Some might enjoy his approach to the issue:

http://www.forbes.com/sites/peterjreill ... ed-by-irs/

Sincerely,
Maury Enthusiast!

[Arthur Rubin]

Someone is "playing silly games", anyway....

[ArthurWankspittle]

Admins may want to move this to a different thread.
I saw the name linked through Fark and thought: I know that name. Is this Kent E or Eric son of Kent?
http://www.patheos.com/blogs/friendlyat ... th-grader/
http://www.youtube.com/watch?v=HhDPrP-t ... e=youtu.be

[Paths of the Sea]

Admins may want to move this to a different thread.
I saw the name linked through Fark and thought: I know that name. Is this Kent E or Eric son of Kent?

http://www.patheos.com/blogs/friendlyat ... th-grader/
http://www.youtube.com/watch?v=HhDPrP-t ... e=youtu.be

Fits in here just fine, if you ask me!

That's Dr. Dino's (Kent Hovind's) boy; the one who has taken over the family's fraudulent young-earth creation-science ministry and make like it's now legit.

I don't know if he's succeeded in making in a legitimate entity and in reporting his taxes properly.

Meanwhile, a joint status report is due by the end of this year from the Government and Dr. Dino (aka Kent Hovind) regarding what is going on with his pending U.S. Tax Court case. The trial was earlier postponed, so maybe they can get it rescheduled for some time next year unless some other resolution is determined.

That might be interesting if we can get the text of that report.

Sincerely,
Maury Enthusiast!

[Arthur Rubin]

Admins may want to move this to a different thread.
I saw the name linked through Fark and thought: I know that name. Is this Kent E or Eric son of Kent?

http://www.patheos.com/blogs/friendlyat ... th-grader/
http://www.youtube.com/watch?v=HhDPrP-t ... e=youtu.be

Fits in here just fine, if you ask me!

That's Dr. Dino's (Kent Hovind's) boy; the one who has taken over the family's fraudulent young-earth creation-science ministry and make like it's now legit.

I don't think the fraudulent young-earth creastion-science ministry was exactly tax fraud. It probably fits somewhere around here, though.

[Paths of the Sea]

I don't think the fraudulent young-earth creastion-science ministry was exactly tax fraud. It probably fits somewhere around here, though.

How about if I said that "the joint tax fraud of the Hovinds occurred in the operation of their young-earth creation-science ministry"!

Sincerely,
Maury Enthusaiast!

[AndyK]

Irrespective of son-of-Hovind's speeches, debates, etc, (if I recall correctly) he is starting from nothing.

I seem to recall some documents related to the seizure and sale of DinoLand (plus associated assets).

As I no longer have access to the really good stuff related to the various tax cases, I'd appreciate an update from someone who has more current information.

[Paths of the Sea]

As I no longer have access to the really good stuff related to the various tax cases, I'd appreciate an update from someone who has more current information.

A decision was recently entered in the Jo Hovind case, finding her liable for a lot of tax, penalty and interest; including the civil fraud penalty. That was based on her part in operating the family business/ministry.

Kent Hovind's Tax Court trial is still pending, after being postponed once. As previously noted, a joint status report is due by the end of this year.

A few months ago, some of the old property was sold at auction for, as I remember, $100,000.00. That was related to their criminal problems and it won't go very far in paying the fines imposed in those cases.

The personal income taxes before the U.S. Tax Court involve millions in liabilities in addition to the amounts in the criminal case.

Eric Hovind, their son, took over the family business/ministry and has set up new organizations to operate behind and has been making nice to their champion Ken Ham; even to the point of hiring a fellow named Taylor, as I recall, to help Eric move things along. Maybe he's gone legit; maybe not. I am not privvy to any information that would be convincing that he's not following in the path of his parents; though more cleverly.

Sincerely,
Maury Enthusiast.

[Paths of the Sea]

I also just checked the Kent Hovind blog at:

http://www.kenthovindblog.com/

Kent's efforts to keep his criminal case going appears to have fizzled after about 100 different motions were denied in short order.

I don't think Kent has ever even tried to discuss his and Jo's personal income tax problems related to the "ministry" on his blog.

We'll have to wait and see if Jo is going to try and appeal her Tax Court decision.

Sincerely,
Maury Enthusiast

[darling]

From Eric Hovind:
"We are pleased to announce that on October 3, 2012, the United States Internal Revenue Service (IRS) approved God Quest, Inc. (Creation Today is a DBA of God Quest, Inc.) as a 501(c)(3) charitable organization."
http://www.creationtoday.org/501c3-non- ... ic-hovind/


From Kent Hovind:
"I still maintain my innocence and will fight this injustice until it is overturned or I die. Over 40 lawyers have looked at my case and agree that I broke no laws but am indeed a political prisoner. The government violated over 20 laws to put me here. Most of them are explained in document #365"
http://www.2peter3.com/court_documents.html

I would think that anyone with more than a passing interest in tax law would be able to spot the rather large leaps of logic needed to turn document 365 into a winning argument.

[AndyK]

OBJECTION

It already IS a whining argument.