James L. and Marla J. Tarpo, et al., (2009)
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James L. and Marla J. Tarpo, et al., (2009)
T.C. Memo. 2009-222UNITED STATES TAX COURT JAMES L. TARPO AND MARLA J. TARPO, ET AL.,1 Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket Nos. 10338-03, 10303-04, Filed September 24, 2009.12819-04.James L. and Marla J. Tarpo, pro sese.Kevin Coy and Sherri Wilder, for respondent.MEMORANDUM FINDINGS OF FACT AND OPINION HOLMES, Judge: James and Marla Tarpo wanted to protect as much of their income from taxation as they could. There's nothing wrong with that if done legally, but the Tarpos fell in with a specialist in abusive tax shelters. Following his advice, they put James's business into a trust, manufactured spurious deductions, and misreported large amounts of capital gains as capital losses--when they reported the transactions at all.We wade through the available records to determine what the Tarpos owe and whether they should be penalized.FINDINGS OF FACT The Tarpos were a dual-income family during the years at issue--1999, 2000, and 2001. Most of their income came from James, a computer programmer who contracted his services to corporations in the name of his sole proprietorship, ATE Services. Although he had several clients during 1999-2001, he worked mostly for a corporation named MaxSys. MaxSys and most of James's other clients paid their invoices with checks made out to ATE Services. Marla Tarpo was an independent beauty consultant whose primary financial contribution during those years was the deductions in excess of income she repo...See the full content of this document
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