Olinger v. Commissioner of Internal Revenue

• Decision Date: 08 June 1956
• Docket Number: No. 15870.,15870.
• Parties: Ethel OLINGER, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

234 F.2d 823 (1956)

Ethel OLINGER, Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.

No. 15870.

United States Court of Appeals Fifth Circuit.

June 8, 1956.

Robert J. Hobby, Lester L. May, A. D. Burford, Dallas, Tex., for petitioner.

Charles K. Rice, Lee A. Jackson, Robert N. Anderson, Carolyn R. Just, Asst. Atty. Gen., John Potts Barnes, Chief Counsel, Internal Revenue Service, Rollin H. Transue, Sp. Atty., Washington, D. C., for respondent.

Before HUTCHESON, Chief Judge, and RIVES and JONES, Circuit Judges.

HUTCHESON, Chief Judge.

This appeal is by the taxpayer from a decision of the Tax Court, sustaining the commissioner's determination as to deficiencies and penalties. Her counsel concedes that the taxpayer, who conducted her own defense poorly and ineffectively, failed to carry her burden of proof as to the taxes in the original ninety day letter, and the decision should be affirmed as to those deficiencies. He, however, insists that the commissioner has not borne his burden as to the additional deficiency for 1947, pleaded in his amended answer,¹ and as to the fraud penalty for 1949, and that the decision should be reversed as to these. It is his position that the question presented by this appeal should be resolved by reference to the burden of proof on each issue and to the fact that each of the parties failed to introduce proof sufficient to sustain his burden.

For the reasons to be stated, we agree with these views. The first of these reasons is that, while we cannot permit the failure of the taxpayer, through unwillingness, ineptness or inability to sustain the burden imposed upon her as petitioner, to excuse her from the consequences of that failure, neither can we permit the commissioner to escape the consequences of his failure to sustain his burden.

The second is that, while petitioner's proof is sketchy and unsatisfactory, indeed wholly insufficient, in support of her attack upon the deficiencies, the commissioner's proof on the issues upon which he carries the burden is no better.

As pointed out in petitioner's brief, with regard to 1947, this proof consisted merely of showing the purchase of 100 shares of stock on Dec. 20, 1947, for $2900, and the further purchase in 1947 of 200 shares of another stock for $1800. No proof was submitted as to the taxpayer's net worth at the beginning or ending of the period, and the application of the cash expenditure method as here with neither a head nor a tail to it will not do.

With regard to the fraud issue, the commissioner has failed to show, by convincing evidence, that there was unreported income in any of the years and, but for the fact that the burden of proof was on the taxpayer as to the original deficiencies, the commissioner would be...