W. J. Ohlinger and Viola Ohlinger v. United States

The Ohlingers, who are husband and wife, were engaged in farming in Good-ing County, Idaho. They filed an income tax return for the year 1942 reporting sales in the amount of $23,880.12 and an income -tax of $151.89, which they paid. In their return for the year 1944 they reported sales in the amount of $70,- 819.46 and an income tax of $5.00, which they paid. An investigation by internal revenue agents disclosed that the amount of the Ohlingers’ sales during 1942 was $40,647.54 (not $23,880.12 as reported), and the correct income tax, $1954.19 (not $151.89 as reported). The investigation also disclosed that the 1944 sales amounted to $171,105.67 (not $70,819.46 as reported), and the correct income tax for that year, $25,602.99 (not $5.00 as reported) .

The Commissioner of Internal Revenue determined that the deficiency in each year was due to fraud on the part of the taxpayers and added to the deficiency 50% of said amount under the provisions of Section 293(b) of the Internal Revenue Code. The Ohlingers paid the entire amount of the deficiency, ($27,400.29), plus the 50% addition ($13,700.15). They concede that the amount of the deficiency is correct but assert that the 50%…